The Stallion has been talking about the number of stocks that have dropped double digits in the face of earnings disappointments.
I also think this has some relevance. The move up in the last few days strikes me as particularly nervous. Nervous rallies can of course be huge but if this notion holds any water it is worthwhile to understand the waters that the market is now swimming in.
I am still skeptical about the market (recurring theme) but I think this environment continues to play into what I have been saying about how to manage around this. For the last couple of weeks my sentiment has been wrong but the portfolio has been much less wrong (so to speak) than my sentiment.
I can't fathom how the market can go higher but who says I have to fathom anything. Actions matter more than opinions and why I urge over and over against big bets like 100% cash or the like.
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4 comments:
As for don't bet so much on cash, why not if the environment per Hussman for example cries out poor risk. If the trend must be your friend, then one is ready to jump in and out as necessary. On the other hand, a little voice in me agrees with you. Too many decisions. I hope, Roger, that you will keep drumming the message as a counterpoint that I indeed may need for the do it yourselver.Who is the stallion?
I have been somewhat but not completely silent durring this correction.
You have a downward tilt, I still have an upward bias. Time will tell who is correct.
With all due respect (and I respect your opinion a lot) you need to consider the up side more thuroughly (I hope)
I will concede I am concerned, but I remain fully invested and optimistic about the long run.
Name witheld because I am not as thick skinned like as our valliant Blogger who enhances all of our portfolios. I simply have no time for the critical debate when I am wrong and I know I will be wrong from time to time.
I should not post on a long travel day.
Good comments. They share what other people are feeling/thinking. One reader is closer to bullish and the other closer to bearish. OK!
The Stallion is Bob Pisani.
To the bear, my view on too much cash is that being a market skeptic could be dead wrong right here. Markets go up when they shouldn't all the time throughout history. Often turns in the market are big and fast to the upside when a lot of folks are off guard, 2003 comes to mind.
I have written numerous times that missing huge move is much worse than simply lagging a huge move. For all I know we could rally 30% from here in the next few months and then the rest of the decade could have zero return. That scenario is inlikely but if it happens I would be hurting people badly with a complete miss.
The bull says he remains fully invested. Perfectly valid. I would hope that this person has some sort of catalyst to get defensive. There will absolutely be a big move down in the US market some time in the future, when that comes (this is not a prediction of when) reducing will be important.
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