Dennis Gartman, publisher of “The Gartman Letter,” is a very smart guy and (paradoxically) a trader. I have always said trading is very difficult, and that those who do it well are not only very clever (few and far between), but may have special instincts that allow them success. They guess right more often than they guess wrong. They are quick to admit their mistakes, take their lumps and move on…something most people are unable to do, especially when dealing with their own money. Nonetheless, despite his propensity to trade, Gartman’s longer-term perspectives are interesting and thought provoking. I find him to be an interesting voice in the forest of noise.
“A condition where a security’s price heads in one direction, but then is followed quickly by a movement in the opposite direction. The origin of this term is derived from the push and pull action used by lumberjacks to cut wood with a type of saw with the same name.”
Mr. Gartman gave us a quintessential whipsaw between April 4th and April 21st. For those who followed Gartman’s aggressive SELL advice, Friday April 4, and were spooked out of the market (or at least some of their holdings), unless they subscribed to “The Gartman Letter” they would not have received the BUY flash issued the very next week. He did not come back on CNBC to sound the ‘all-clear’. Importantly, CNBC viewers would not have been aware of this unless one of the panelists on “Fast Money,” April 21st, asked Gartman about his current stance on the market…to which he replied, “Pleasantly long.”
“Wait, wait, hold on!”
This was the non-plused reaction of “Fast Money” host Melissa Lee, who went on to say “You were scared out of equities and now you are ‘pleasantly long!'” Gartman then contended (briefly) that he was on the show the previous week reversing his position. He quickly pivoted to indicate he issued the BUY in his market letter. Obviously, he has a pipeline into CNBC and should have trumpeted his change of heart there, after he issued his market letter. The change had to be dragged out of him…very bad form Gartman. The videos never lie.
Here are the two videos: The fearful sell and the quiet return to “Pleasantly long.”
The lesson is that if you listen to these prognostications, you have to be prepared to be the last one to know when the opinion changes. This holds true even when you are dealing with the most respectable pundits.
What do you think?
The information presented in kortsessions.com represents my own opinions and does not contain recommendations for any particular investment or securities. I may, from time to time, mention certain securities for illustrative purpose, names where I personally hold positions. These are not meant to be construed as recommendations to BUY or SELL. All investments and strategies should be undertaken only after careful consideration of suitability based on the risks, tolerance for risk and personal financial situation.
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Bill, I seldom take issue with you but on this one I do. Gartman has a new letter for which subscribers pay what is probably a serious charge. They are entitled to his opinions as they are developed. The rest of the public, non subscribers, are only entitled to truthful answers to questions when they are asked of him, i.e., Melissa Lee, etc. As far as I can tell, he answered her questions honestly when asked – nothing more, noting less. How can you fault him for that ? Not that I would not have liked to have the benefit of his opinion earlier, but there is a way to get it. Simply sign on to his letter.
Harold, I am not suggesting that paid subscribers to Gartman’s letter should not be first in line for his changes of heart. That’s what they are paying for. I believe he did that earlier in the day before coming on “Fast Money” and issuing his public SELL commentary. I am suggesting when you make a public commentary (a la his 4/7/14 call), and you change your mind, you should (after notifying your regular subs), the same day (or at least, same week) make sure that the CNBC audience gets the call. It is the ethical thing to do. Gartman would not have disclosed this change, if one of the panelists had not ask about his current posture on the market. His position had changed to positive a week before the second clip.
As a broker, even when people did not buy an idea that I had urged them to buy, I would always return quickly to my victims to make sure a reversal of opinion was quickly publicized. And, believe me, I hated making those calls.
Gartman would not have said anything about his reversal, unless prompted by a question. That to me is very bad form.
I believe if you are a high profile player like Gartman, and make major public pronouncements, you have to publicize changes in a timely fashion using the same media vehicle. It is a matter of ethics.
Bill,
My impression was the Gartman was replying to specific questions, asked at different times, by M. Lee or others and not simply issuing voluntary pronouncements . Presumably if he had been asked the question by Lee on the day after he changed his mind on the market’s direction he would have been morally required to indicate his change of heart. That is how I would dice the potato.