Zowie

Like Mike LaFontaine might say, "Whah happen?" to the market. If you don't know, that was the tag line by Fred Willard's character in the movie A Mighty Wind.

The market has been smacked recently. I have written a couple of somewhat negative articles lately, hoping I'd be wrong. I was talking to a buddy at Merrill Lynch this morning and, no great shock, there's no catalyst for stocks to go up. I wrote for months that I though the year end would be up but that I didn't see why it would keep going in the new year, but the extent of the selling has surprised me. I continue to preach the same plan of owning a lot of high yielding foreign, US growth but not a lot in tech, emerging markets and some innovative CEFs that have a good yield.

Many months ago it was popular to say we would have a range bound market. If that turns out to be correct, the selloff would be perfectly normal. I don't expect this to evolve into down a lot but you know you know the things I am looking at to determine whether or not to get defensive and we are not there yet.

The foreign stocks I own have held up a little better than the domestic stuff but that could change at any time and I am not hung up on that. The market moves around a little but the dividend keep paying. The dividends do a lot of my job for me in a market like this.

One observation about this year is that money is flowing out of a lot types of assets that have low correlations to each other. For example stocks and gold tend not to correlate but both are trending lower. No great revelation but it makes me think this is more emotion than fundamentals. I think there is something to the thought that short term emotions rule the market but in the long run its fundamentals. Some of the companies that have reported already have had great reports or gave good guidance or are taking market share. I am lucky enough to have some companies like that, but they are down this week anyway. Usually that is a good time to buy. We'll see.