I think I covered a lot of this ground the other day and maybe now it is playing, or it isn't. There is tremendous psychic value in preparing mentally for a decline when odds of one are pretty good and after a 40% rally... The green shoots sentiment was bubbling up pretty good there for a while. I thought that excitement was overdone and if the market goes down to 700 on the SPX then I imagine that the fear (or whatever other feeling it might create) will be overdone as it was a few months ago, IMO.
Not to be a wise guy but the US financial system and ordinary way of life was perceived to be in serious jeopardy. We have all sorts of problems the magnitude of which are quite bad and if you think of policy in terms of either speeding up a fix or hindering a fix we might all lean toward hindering right now but there is no need to stick a fork in the US--even if the SPX does break the March low before this is over.
I will continue to say that the better way out for most portfolios will be with more foreign exposure. The US probably creates a drag for a lot of countries, yes, but it will not cause all countries to grind to a halt however.
At this point, down a ton from the peak and churning around for a while now, I think it makes sense to still have some defense on and also start to think about adding to themes you believe will be important over the course of several years. I've got a couple of things mostly figured for the next two or three purchases when the time comes before now have cash built up, a little less than I did earlier, and now a full starter position in SDS (recall I added some a couple of weeks ago).
There is one reader (I think just one) who keeps posting asking what I'm going to do now that we are below the 200 DMA again. He also asked before it went below, what I would do. A few things, first I will not front run anything I might do for clients in a blog post. Second, we are not handing out fish here, do your own work. Third I just added some SDS a couple of weeks ago. No one should copy anyone. This means you should not copy me. I don't have all the answers I have the framework for a strategy that I have been working with for a while now and while you can look at the quarter end videos to get a sense of how it has gone, do you really think you are helping yourself if you copy someone else in the middle of the event?
That is just not what this site is about. For the rest of you, thanks for indulging me that.
We are headed out to Mt Hood this morning before heading over to Astoria. Hood River reminds us a lot of Durango, CO. On a hillside, some water down below, somewhat touristy, some neat buildings. Candidly we had a tough time getting any pictures we really liked.
16 comments:
Cramer, among others, has begun touting healthcare as the next leadership sector (I know, I know.)
Roger, is it too early to tell what effect a government investigation into commodity etfs will have on their use as a portfolio diversifier? Sure looks like the skittish money is bailing out of oil and nat gas.
Thanks much. Enjoy your trip!
More than skittish money is bailing out of oil: There's already a surplus and the global economy is still contracting so reduced oil consumption and, eo ipso, reduced prices for crude is the most probable trend.
Ascribing this trend to government intervention may appeal to some, not that it makes any difference.
Roger,
Readers do not want you to hand out fish. Readers want you to fillet the fish, season it cook it properly and serve it on fine china. After doing all that expect the chef to receive a lot of criticism for the free food. (You wonder why the rest of us do not have a blog?)
S&P 700? I think the rally will resume sooner than you think.
RW - I think you may be right in the short short run, but when the Saudi's say "$74 a barrel feels right" I tend to beleive we will be headed back up there over the long run.
RR - can you ban the guy who posted Cramer's 2 cents - surely THAT is not what this sight is about :)
We got some oversold snap-back this morning but the message that things are not getting better in the world outside is rather clearly penetrating the market I-wanna-feel-better-again envelope and weakness continues. I would really like to become less defensive myself -- it does start to feel cramped or maybe pinched is a better word -- but just can't justify relaxing. Added a touch of SDS, took a bit off the table, and am oiling my fishing gear; if I think about this any more I'm going to wind up talking myself into something stupid.
As to they Saudi's, they're worth taking seriously, and I suppose they could buy up a mess of the oil already stockpiled (including all the full tankers that are basically just sitting at anchor) but they can not prevent other oil producers from selling nor can they prevent the global economy from contracting further. IMHO a bet on higher oil here is even more risky than a bet on a lower dollar; not saying it couldn't work, just that the risk vs. reward ratio seems very unpromising.
OT: IIRC Roger you plan to pass through Newport on your loop back to Portland? I recommend a walk around Nye Beach (it's in Newport, a very small township w/ a very big beach) and a bowl of clam chowder at the original "Mo's" Restaurant or, if you are feeling crazy for seafood generally, the "Local Ocean" restaurant and seafood market at Newport Harbor (other end of town on Bay Blvd) is tops.
If staying for dinner and in the mood for entertainment (most nights) and something better than cafe fare (Gato Azul in Prescott range or a bit higher) then Panache or Cafe Mundo, both in Nye Beach, are usually good bets (Cafe Mundo is informal and fun but can get a bit noisy).
The Oregon Coast Aquarium and Yaquina Head Lighthouse are both worth a visit but just walking on that incredible beach could be enough, particularly if you only plan on spending the day.
PS: If time starts getting tight then the Hwy from Newport to Corvallis is a good road and will get you back to Interstate 5 in an hour and a half or a bit less most days. A portion of the road is under construction but last time I was through there the delay was short.
Roger,
when crude was 147 per barrell Paolo Scaroni of Eni came out and sayed that oil should be at $60- $65. Usually markets overshoot/undershoot and was taken down to 32. The events that we are seeing today happen every 80-100 years. If we go down I only see lots of opportunity to load up either in convertible or stocks. I am now very, very liquid. One needs to remember that future returns are dictated by the purchase price. The more prices go down the better it is for long-term buyers, that purchase at low prices. One must make a list of companies one likes and the desirable prices. Then take the plunge when such prices are reached. I am still in the opinion that 2011 will be the bottom. Earning of S&P 500 is about 55. PE wise we are still on the high side. Currently we are in a range. Then a big downdraft will take us lower and time to load up. Roger, a question, don’t you think that countries matter less than the actual company you pick?
Best,
Jeff from Milan Italy
Anyone want to buy DEEP IN THE MONEY CALLS in the worst bear market in a generation?
http://sports.espn.go.com/mlb/news/story?id=4313487
Anon 10.01,
I feel that when one purchases shares at such low prices, the risk is factored in. I still feel that lower prices are coming and one has the luxury to wait and take his time. However it is not a bad idea to compile a list. I am not talking about today. Today I refrain to purchase some share of an UK company, but when it was hitting its lows I refrain and will see if I can pick up for less. However I am buying with what I made in cash for 2009. Options are not my bag.
Best,
Jeff from Milan Italy
Jeff,
Anon was taking a poke at Lenny Dykstra (see the link he posted). It wasn't serious :)
Yes . I was taking a poke at "Nails". I wonder how many people he took down with him...
"can you ban the guy who posted Cramer's 2 cents"
It's best to get input from all sources
In fact, some of his ideas have been very good...such as... the government should sell 30yr 5%bonds to individuals for their retirement accouts.
Also, Cramer's ranting about of market manipulation and lack of regulatory oversight has been correct. Until fairness of the individual investor is taken under advisement, the market will be extremely risky.....fundamentals need to be the leader in market activity again.
From reading multiple financial blog sites, I have to admit...
We are all running around like chickens without heads.
Rogers site, however, has to be one of the best
Hey, Francis, Lighten up! I am sure it wasn't Roger who halved your net worth last year....
I too am on vacation, at Palm Beach in our condo on Singer Island (right acros the channel from the homes of our liberal friends' favorite - Rush Limbaugh).
I journeyed to see Bernie Maddow's home today. That came in second place to visiting my old vacation haunt, the Alligator Farm inland. Both have things in common, IMO.
Around the Tiki Bar on the intercostal near Riviera Beach, a lot of bar talk on finances. It had been in years past about lonely 40 something wealthy women. Sad the conversation is now boring.
Enjoy your sojourn to Oregon.
T
nice Oregon trip
Post a Comment