There are tons of new readers the last few weeks so I thought it would be important to go back to January when the ‘BEAR’ market started rearing it’s nasty head. To some, it seemed like there could be some bargains, for me, I was just taking my losses and honoring price.
Flash forward 10 months and now you see what happens if you don’t heed price.
It is hard to do nothing. I am here writing every day trying to stop myself and show some discipline. So is there an end in sight?
It really depends on your timeframe.
I have poked around and probed pretty hard the last week to no avail. I just wasted a lot of time, energy and some hard earned profits.
It’s easy to do the math. If we drop 500 points a day for 20 days, we get to zero. Problem is, the market does not work that way.
I penned this post in January entitled ‘Is This a Bear Market ‘.
Is it ever!
If you don’t think it is and you are not respecting the price action, you will be sorry. The global markets were fantastic since since 2003 for long only investors (like me), but now is shaping up as payback. I have been viciously aggressive in protecting big gains and cutting loose my dogs. The Fed just cut 75 basis points and all we got was a weaker US Dollar and Gold at another all-time high of $910. Not good for any of us. It’s really not great to see a new problem being fought with the same bullshit soltion of the last 20 years.
Earlier in January I talked about the ‘Confidence Crash ‘ that was developing. I was already down to 10 percent stock allocation by than as I outlined in the post.
This is not a crisis that will be solved with tax cuts and lower interest rates.
If you make it easier for a bank to lend money and they are not lending it, what’s the f@#king point. I have many friends in Phoenix, smart guys, guys I would give my last dime, that can’t get breathing room for their projects.
Why the hell would that person be inspired to buy stocks right now, down 500 more points or 2,000 more points for that matter.
There is no REAL number that relates to mood or confidence. Banks are using cheap money to shore up their putrid balance sheets.
We need leadership right now. Confidence comes from the top. Not from this blog, not your mommy. Interest rate cuts wont cut it. Tax incentives?…WTF. Have you seen the start-up market lately. We are all in that business already. We don’t need no stinkin’ incentives. If you are a working middle class executive, you were just fired or will be. That’s pretty good incetive.
What I would like is, for example, for the best city in the world – New York, to have a f@#cking airport that looks better than a Russian airport. Can’t our government create confidence by raising taxes for jobs for legal immigrants that will make that happen and get people spending and believeing in America?
Instead, Bush comes on TV Friday and says they are “WORKING on a plan”. You think?
Sure I may dabble in the indexes tomorrow, mainly because I can and it seems like the right thing to do, but the average investor should not until we see some leadership.
In the interim, stocks are just pieces of paper that have a market because of perception. The perception that chaos won’t ensue. Frankly, we have chaos. Catching this falling knife and making money off it would just be luck at this point. Big woop on being lucky. All yours.
I have been pretty consistent on the stand aside mantra until last week. New readers have confused my buying last week with being undisciplined. Maybe. In hindsight, I am early building up some positions in my favorite names and may have to do a full retreat. Such is the business of MONEY MANAGEMENT, something the fund managers and investors have forgotten. It is ok to probe and adjust your strategy if you have a plan.
I did not watch the presidential debates or contribute to the Twitter conversation last night as I can’t pick winners and I know nothing about politics, but I eavesdropped on the conversation on twitter and listened.
I know one thing…ten months later and the confidence crash I was describing back in January is not slowing down, but accelerating.
Hard to see a real end in sight from here. Obviously, I hope I am wrong, but I hate relying on hope and that seems to be what is being sold.