This week's commentary from John Hussman was interesting. It talked about the futility of trying to predict what the stock market will do.
The article looked at the issue in a way that is very different than what I try to do. I spend a lot of time trying to weigh different potential outcomes and then planning to some degree of likelihood what action I will take in the face of what ever scenario comes.
The key here is not to focus on whether I am right about what I think will happen but to have something in mind no matter what happens. I have spent a lot of time lately trying to plan for a negative environment for domestic equities. I am already invested for a positive environment for equities. I have a little more cash than normal but Google and Statoil have helped offset any cash drag for the third quarter.
I have put together a plan if I need to get more defensive or more aggressive. Doing this sort of thing on the fly is probably not my strong suit, hence my need for advanced planning.
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3 comments:
I've noticed that a lof of bloggers and even experts say we're in a secular bear market and that the DJIA & S&P 500 will hit new lows.
Do you also feel we're in a secular bear with a cyclical bull playing itself out?
I find comfort that the "experts" think the market will hit new lows ( is a new low 768 in '02, or 435 in '94 or 294 in '90---and so on... ).
g
George!
Great point I forgot to touch on that.
New lows? I'm not sure what that means either.
Personally I have a lot of trades to make over the next 50 points down in the SPX, once we crack 1200.
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