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Doug Kass is the general partner Seabreeze Partners Long/Short LP and Seabreeze Partners Long/Short Offshore LP. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.
On Dr. Nouriel Roubini
5/12/2010 9:43 AM EDT
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Let's revisit a series of columns that I have written about Dr. Doom and the perma-bear cult.
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On Columnist Conversation, Jim "El Capitan" Cramer details his frustration with the media's preoccupation with Dr. Nouriel Roubini, and I agree with Jim.
I am reminded of something that Grandma Koufax once said to me in describing a market pundit in the 1960s who was batting .110: "Dougie, he is always wrong but never in doubt."
Roubini's popularity seems to be the dominant reason why the business media feel the need to book this standard-bearer of bad news as frequently as possible, especially during periods of crisis (like we have recently seen), and are unwilling to question his views (even when he is woefully off base).
Roubini does not have a concession on being wrong; we are all often wrong, especially in a business where Mr. Market humbles us so frequently. At least, I recognize that I am often wrong.
Back in the summer of 2009 Nouriel "Dr. Doom" Roubini guest hosted "Squawk Box" on CNBC, and I wrote the following on The Edge:
I think it's fair to say that almost everyone, prior to my generational bottom call in early March, considered me a perma-bear.
In summary, it is my view that perma-bears, similar to their first cousin perma-bulls, rarely make money and, in the main, shouldn't be listened to most of the time as even when they call a downturn, they almost always overstay their positions.
Perma-bears and perma-bulls are attention-getters, not money-makers.
This is not meant to be an ad hominem attack. I admire Roubini's body of work, but he has been terribly wrong of late, like many of us are at times. I hate it when talking heads don't admit they're wrong; I try to admit all my mistakes, and they are many!
The question at hand is whether Roubini will be intellectually honest and admit he was wrong on a number of counts, including identifying the seeds of the collapse, the policy initiatives that have defined the recovery and the reality that his market forecasts were 100% incorrect.
I then proceeded to present a series of 2009 columns that I had previously written about Dr. Roubini and the perma-bear cult. Here they are:
7/16/2009 2:21 PM EDT
Jim and Chris:
I have seen too many in the investment world and on other stages make one outstanding call only to express a continuing dogma (and an absence of rigor) in the face of changing conditions.
I have characterized the March bottom as not only a generational one, but as The Nouriel Roubini Market Bottom. This was not meant as an ad hominem attack on Dr. Doom, just an exclamation point to my call for a market turn.
Perhaps Dr. Doom's expression of optimism will mark The Nouriel Roubini Top!
6/9/2009 3:31 PM EDT
"Those who can't do, teach. Those who can't teach, teach gym."
-- Woody Allen
Jimmy, I suppose, unlike a money manager or an individual investor who seeks to profit from Mr. Market, Nouriel Roubini's charge is to continue to market his consulting business.
It's a great gig if you can get it and if people buy it!
6/9/2009 2:54 PM EDT
Jimmy, where the heck is Nouriel Roubini, who confidently expressed the notion that most major money-center banks are walking zombies?
Will he be intellectually honest and admit he was wrong on a number of counts, including identifying the seeds of the collapse, the policy initiatives that have defined the recovery and the reality that his market forecasts were 100% incorrect?
I hate it when talking heads don't admit when they are wrong. I try to admit all my boners, and they are frequent!
5/27/2009 7:25 AM EDT
"An optimist is a person who sees a green light everywhere, while a pessimist sees only the red stoplight.... The truly wise person is colorblind."
-- Dr. Albert Schweitzer
On The Edge, I have often written that both perma-bears and perma-bulls are attention-getters, not money-makers.
The perma-bear cult, of which I have often been accused of being a member, is an especially strange clique that often sees the clandestine plunge protection teams saving the U.S. stock market at critical points. They have never met a government statistic they like but instead see the U.S. government as "massaging" and revising employment, inflation and many other economic statistics in order to paint a positive picture. They express contempt for second derivative economic improvement and never or rarely ever see prosperity. They view seeds of recovery as Superman saw Kryptonite and extrapolate economic/stock market weakness to the extreme.
And they never ever or rarely make money.
Ironically, the perma-bear crowd is typically uninhabited by money managers. For example, the largest and highest profile short seller, Kynikos' Jim Chanos, is not a perma-bear. Jim systematically searches for broken or breaking business models, and he understands market and company-specific risk/reward. Nor was my friend/buddy/pal David Rocker a perma-bear. He, too (before he retired from Rocker Partners), identified adverse secular changes facing companies and, similar to Jim Chanos, had an uncanny ability to unearth frauds like Baldwin United, Enron and Lernout and Hauspie (among many others).
Rather than managing money, the perma-bear crowd is typically inhabited by writers of market letters, investment strategists and economists turned strategists, all of whom have little or no skin in the game. They also make a lot of speeches during downturns for a helluva lot of money and often write editorials in the Financial Times, New York Times and Wall Street Journal.
By contrast, the job of a money manager is not to be dogmatic. And to paraphrase Jim Cramer, neither is it to make friends; it is to make money.
The perma-bear species is a fickle breed, especially in its ardor for purging from its ranks anyone who breaks the faith. Woe betide a former perma-bear deemed less bearish!
In summary, perma-bears, similar to their first cousin perma-bulls, rarely make money and, in the main, shouldn't be listened to most of the time as even when they call a downturn, they almost always overstay their positions.
And they may be harmful to your financial health.
3/17/2009 11:00 AM EDT
"What are they going to say when he is gone? He was a kind man? He was a wise man? He had plans? He had wisdom?"
-- Apocalypse Now, Dennis Hopper's Photojournalist
I am going out to a multihour mind melt.
The Nouriel Roubini stock market bottom is in.
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