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Ritholtz on Hartzman

January 10, 2013

From Barry Ritholtz at The Big Picture:

There were lots of warning signs that the market’s enormous collapse was ending. Indeed, the biggest-since-1973 move to the downside was accompanied by all manner of signs that it had run its course. Every sentiment reading was pinned deep into the red: % of stocks below their 200 day moving average; new high/lows; insider buys/sells; market breadth; ARMS Index; downside volume; AAII Equity % of portfolios. From November 2008 to January 2009, Treasury yields dropped from 4% to 2%, then went negative in real terms. The VIX spiked to almost 90 late in 08; it was still over 50 in March 2009. Indeed, it was hard to find a rational reason to be short in March 2009 — except naked fear.

Obviously, Matt Taibbi is not an investment professional and George Hartzman, by his own admission, failed to cover his shorts in time. But anybody else who maintains they made money during this time by anything other than a buy and hold strategy is full of shit.

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