This from the gang at Bespoke.This sort of thing is very important to keep tabs on. I believe tech topped out a hair under 30% and telecom was near 12%.
Over time sectors will get way out of proportion. When that happens it makes sense to lighten up.
9 comments:
Hi Roger, quick question, a bit off-topic. I'm thinking of switching out of a Japan mutual fund I have at my Norwegian bank (in NOK) into a Japan ETF at my Ameritrade acc (in USD) to avoid some management fees. Am I right in thinking the currency in doesn't matter, as long as it's basically the same stocks? I figured as much, but wanted to check.
Thanks!
i would tell you to find a website that will let you chart one versus the other to see if it matters.
How does one know what is out of whack or in whack? IMO, this is a good idea but a weak analysis method. Better would be to compare price to book of various industries with their historical norms and bet on some reversion to the mean.
On an unrelated note, am I the only one in the universe who hates the reptilian investment notion that a business somehow involving semiconductors in some way or another is a subset of "tech" is a subset of "growth stocks"?
Semiconductor manufacturing and computer hardware are basically cyclical industries. This category scheme is a vestigial remnant of bubble investing. There may be good stocks or bad stocks in "tech", they may have interesting IP or sell commodities, and the category itself is indescribably dumb.
A sector can't have cyclical stocks? Would you create "tech cyclical" and "tech non-cyclical" sectors?
I'm saying that "tech", in the way the market uses it, is not a fundamental economic concept. It doesn't make any economic sense to talk about what is the correct percentage of market cap weight for "tech" in the S&P 500. It does make at least some sense to talk about the average price to book for "banks" or "steel makers" (though one should consider many other factors before making investment decisions).
Hey Roger. Way to go on the hits. Say, I stayed mainly in the market during this correction and hedged with
SDS. Now that the Bulls are running, I guess I should start decreasing my short postions in anticipation of more upside, but am afraid to sell all of the hedge.
Any thoughts about strategies in this regard.
I stopped subscribing to an all-out or all-in market timer and will save $400. I don't think any of the market timers are really too good, although one of the 3rd party "objective" rating sites says Ken Fisher is right 72% of the time, and at the top of the timing heap. Thanks, Scoot.
I just took a look at Jason Goefert's intermediate term sentiment models and can't remember the last time all 4 were unanimously signaling extreme levels of pessimism.
Roger, I wish I could post the charts. I'd love to hear your take.
scoot,
this is a circumstance where the chance to get whipsawed. in fact the more you own the greater the potential whipsaw. I am close to 3% so can afford to be "wrong" with the position. Tough to give a real answer here.
TomK I'm glad to take crack at if you want to email me.
steve IMHO hang onto the hedge.
The Sirens are calling you to the rocks, but the boat will soon bust.
Tech is holding us right now and I find that a scary thing because tech can turn on a dime when CEO's decide they are now longer spending. With many layoff's looming I think that spending cuts will also come with it.
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