Those are my thoughts as this market continues to lift with seemingly no resistance. I am no less skeptical. I would be happy to remain skeptical right through a new high.There are countless times in market history when the market rallies when you don't expect it to, which is exactly why I write repeatedly about not making big bets.
I sold an emerging market name that only a few clients own at the open but other than that I am letting things run for now. I wish I had more exposure and I am glad I don't have less.
8 comments:
I wrote on your December 19, 2006 and December 20, 2006 blogs about how the crowd was ignoring the pattern after a long flat market; about how one can find three other long periods of sideways consolidation; about how the market is very strong in the year after a long consolidation.
Today the market hit my target. I wrote back then that my 1421 prediction would probably be low but closer to the mark than your call and much closer to Barry's 880 number.
It has been a wonderful year for my stocks too. CAL is one that I mentioned a number of times with great confidence and it is up around 100% so far. Like they say, no bragg, just the facts :). Happy Holidays and Happy New Year.
PS: My selection was partly made by finding a spot where few others had chosen. So your idea at the time was good.
I'm not complaining either...I hope the bull continues to run, but I fear risk is increasing with every new high. I'm just happy we're getting some more breathing room.
I too am staying in at about 90% stocks and only 10% cash.
I was also scared this summer as was many over the dreaded inverted yield curve and made the mistake of moving too much into a cash position and lost those September gains.
Here is a good article about why the stock market may have it right and the bond market does not:
http://money.canoe.ca/Columnists/Murray/2006/11/26/2516510.html
Funny, I've been selling emerging market CEFS and some US CEFS into this market.
Seen several of my CEFS that have been at a discount for many years swing to a premium - sure sign to me of the time to get out.
Enjoy your blog.
Ken
Roger, With so many sectors UP, it's interesting to look at some of the lessor sectors to see if they may part of the next pack moving up. What do you think of transports/ IYT? Anecdotally, ACBL/barges get good copy in my rivertown and most of the websites advertise shipping included. Technically, there's reasons to like it but I'll spare the TA stuff. Oddly, trnsports have not suffered higher oil prices,yet. XOM and FDX have a .53 correlation! As a top down investor I am curious as to your opinion.The time may not be immediately at hand, but I'm watching this one closely as a candidate. The talking heads aren't interested. Good sign, eh?
Changing a portfolio that has performed better than expected is as difficult for many investors as trying to turn around a battleship in a canal.
Yet, it must be done.
Thanks for the tip Roger. I am selling all my EEM(Emerging Market ETF) due to you getting rid of emerging markets exposure. You are correct that they have come to far to fast and time to take profits.
Like so many other people I have no idea why the stock market is up. There are many other stock markets in the, which are up. Possibly because economic conditions are improving throughout the world. Hopefully there will be no incidents.
Additionally, I seem to remember reading Dow 36,000 a few years ago, which if memory serves me right seemed fairly possible
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