Zero Hedge Readers Fuel Biggest Rally, EVER

“The 1st rule of Fight Club is: You do not talk about Fight Club.  The 2nd rule of Fight Club is: You do not talk about Fight Club.”  These famous lines uttered by Brad Pitt’s character, Tyler Durden created the mystique of website, The Founder’s pseudonym comes with the image of a shirtless Pitt promoting conspiracy theories and news worthy financial articles.

Readers’ secret allegiance to the website and commitment to ‘Not talk about Fight Club’ was the genius of an allegedly banned Trader, Dan Ivandjiiski.  ZH followers formed a cult as if they had an inside source like Raj Rajaratnam but did ‘Durden’ purposefully lead his legions astray to fuel massive short covering rallies?

The site was launched on January 11th, 2009 just a few weeks before the market would bottom and begin the nearly 5 year rally in risk assets.  There can be no arguing the content was/is prescient and comprehensive but the tilt remains questionable.  Ivandjiiski and the other ‘Tylers’ crank out content with a decidedly bearish ilk and the comment section is carefully managed to promote their “Chicken Little” message.

Claims of “Dow 36,000″ and BTFD have been replaced by “F you, Bernanke” and BTFATH as disgruntled followers capitulate.  Was this part of the plan all along?  Create a site where Bears could gather and be slaughtered en masse?  Say it ain’t so, Tylers.

Ironically, over the last 5 years as a lurker on the site, I’ve noticed most of the original commenters have disappeared.  Whether this is because they followed Ivandjiiski’s advice and been forced to cover at much higher prices, in the case of stocks (or puke long gold positions at significantly lower prices) or because they violated stringent site policies on discrimination isn’t known.

What is known; Investors who followed advice from this heavily trafficked site are much lighter in the wallet.  The last several years have produced highlights indicting Regulators unwillingness to take decisive action on HFT and low-lights like continuously calling market tops and almost daily sarcastic proclamations of “This time is different.”

Now that guys like Hendry, Rosenberg and Bass are bullish on just about everything perhaps a turn in record high sentiment has occurred.  One thing is for sure; the second ZHers turn bullish will mark the Everest of tops but let’s not talk about it…


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