Bizzaro Market

Just about everything is going down today. Over the last few days commodities and equities have generally headed lower. Usually this is not how it works. On days like these my tilt toward commodities and foreign stocks means the portfolios I manage will lag.

While I would rather not lag this is part of having opinions and being invested. Themes like foreign, some (but not a lot as I have written over and over) mining exposure, water and energy are long term in nature. The decision to be heavy in yield, to have reduced industrial exposure a few months ago and hang in with staples are shorter term and more subject to change.

I had mentioned a few times about oil testing $65 or maybe $60 and that if that happened, energy stocks would feel it. Well that is happening now. As a decline or test or re-pricing seemed to be a very logical possibility I am not shocked to see it come (not that I ever predicted a date for this) and so my emotions are in check.

There has been a lot of selling. Some portion of what has been sold will be bought back, that's how it works. Perhaps even more will be bought than was sold. If the end of hurricane season (or whatever this is) has changed your opinion about the long term dynamics of supply and demand you should probably sell. More likely the selling (in the commodity and the stock sector) is short term money reacting and rotating. Now and many times in the future your portfolio will be held hostage to short term reactions, this goes with the territory.