Bear markets? Forget about them. Corrections? Not on our watch! Recessions? No way Jose.We're going to pop on the open and keep this party going.
Yesterday afternoon I watched the NCAA volleyball; it was on at the same time as Kudlow so I missed what was probably a capital markets love fest.
The way I look at things this type of one-way trade is time to hunker down and get ready for some sort of unwind.
A down day or week or whatever is going to come--this isn't a bear market call just a reminder that even if we go to SPX 1700 this year it won't be up every single day.
One question I would ask rhetorically is that if you were willing to sell into the panic down in February/March should you also be willing to selling into what might be a panic up? I did not sell into the dip but I do have a stop order or two out there but I don't expect anything to happen.
It's probably a good idea when the market is at one extreme or the other to think about a fast reversal. For some folks that means placing trades and for other folks it just means changing the outlook.
Managing emotions and expectations is just as important as what you put in your portfolio and after 21 up days in 24, or whatever the number, that is what you need to do.
There is nothing wrong with skeptically going along for the ride.
15 comments:
If one thinks that India offers a decent entry point to accumulate a position...Roger...any preference of vehicle. The only choices I am aware of are the cef(IFN) and the ipath (INP).? The first has a deep discount about where I think/? these things bottom circa 12%; and the latter is ouperforming. Both have good liquidity. ps thanks roger for your comments on the currency asset.
Braveheart said "hold........hold.......hold........."
INP, yes, there are two CEFs that I know of, IIF (client holding) and IFN. There are also several ADRs and OEFs
Roger...does your "yes" indicate a preference be for INP ...any thoughts if I'm considering INP, IFN, or IIF?
Sorry if i'm pushing here. thanks.
my "yes" means nothing other than yes it is an India product, lol.
offering an opinion to a stranger is a bad idea compliance-wise.
This market makes me looks like an expert stock-picker every day. I am not an expert stock-picker, LOL!
"Bear markets? Forget about them."
Yeah! Let's party like it's 1999!
i would rather party like it s 1999 than like its February 29, 2000, lol.
There are a few gambling "rules" that apply to investing - I've always liked the idea when riding a winning streak to take some "profit" off the table and let the rest ride. Any time the market repeatedly reaches new highs, I start considering this option.
I think it'll good to have some cash on hand to put back in the market when we hit a dip or two on the way up to 1700.
As a kid I was always quick at musical chairs. When the music stops, I'll just push a smaller guy aside. POC/Piece of cake. What's with all this LOL? Chances are though I'll be toast.
Hey TomK, I'll have to catch up at the World Beta blog to see if there's discussion about this issue. Distance to the 200dma looks painful. Do you think your sentiment model will give a headsup? So far, it seems to be valid. A contrarian view is that the big bankers hold the cards. That is, they will keep this mkt humming as long as it suits their purposes. I, for one, like to read your posts.
Anon 9:33,
I never liked the idea of using a single moving average for the reason you mentioned. Also, you never know how markets will trend in the future. A 200dma worked great with the S&P500 since the early 50’s, but what happens if the market essentially moves sideways/flat for a 10+ years?
I use 4 moving averages for the trend components of my model:
Russell 3000 200 dma
Russell 3000 75 dma
Value Line Arithmetic 200 dma
Value Line Arithmetic 200 dma
The sentiment half of my model uses 4 different sentiment models. They basically run counter to my trend components when the market get to extreme levels and begins to reverse. So even if all my trend indicators are bullish, my sentiment components can force me to raise cash.
Currently two of the sentiments models are neutral. Goefert’s Advisor/Investor sentiment model is teetering on the edge of mildly OB territory. As of yesterday, he reports the latest AAII sentiment survey results show only 54% of those polled expect the market to have trouble going forward. This is the most bullish AAII poll results since the market bottom last summer, so I’m assuming his Advisor/Investor model move more firmly into neutral territory when he updates it this weekend. The remaining model is mildly bullish, still working off from the OS levels we saw in March.
In a nutshell, market sentiment isn’t anywhere near levels where we will be seeing big red flags anytime soon. That doesn’t mean the market can’t fall from here, but it means the trend is your friend for the time being.
Correction:
Value Line Arithmetic 200 dma & 75 dma
I agree with MattyP's opinion to sell off to some cash and let the rest ride. There is no good scientific way to time a market down-turn, inverted yield curve aside.
That's why I'm currently in a 40% cash position. If the market takes a big hit I can get back in and ride the market back up. I will only do this if I think that the market is WAY over bought.
The trouble with an 'all in' position is that if the market were to take a 50% hit (for the sake of simple math), your portfolio would have to go back up 100% to break even.
The India ETF's that Roger mentioned are all in the India market. Anon 6:50 may also want to consider a BRIC like ADRE or EEB for less risk. ADRE has a 1.36% yield where EEB has only .13% yield. If you care about such things.
There was a time when you ( Roger ) said that you did not really get "panicy" or sell, until the market fell through its 200 DMA.
George, I may not follow. Replace the word sell with take defensive action and that gets close yes.
Ocassionally stocks get bought and sold as part of ongoing active management.
Selling the Yahoo for the reasons I did has worked often enough in the past combined with my dislike for MSFT made it an easy decison.
I have a stop order in for part of the position on another stock across the board that has had a crazy run up. Should that execute I'll have to decide whether to redploy or not.
From the top down 200 DMA for the enitre portfolio but at some point in the process for all top down people bottoms up decisons have to be made.
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