For now he says he is going to ignore short term bullish signs and focus more on longer term fundamentals.
The first money quote is as follows;
Given the high degree of economic uncertainties...I’ve got to wonder what is worth buying and holding onto at this point.
The reason why I think the quote is useful is that it underscores the idea that investing is not easy. I believe there are ways to make it easier on yourself but it is not easy. Everyone has their own process and perhaps given the totality ofSerrapere's process this is a particularly trying time. I don't know if that is the case, just an interpretation. An occasional reminder that this can be tough can be a psychological helper.
The other money quote;
The AI (Arrow Insight) 75-50’s primary objective is to capture 75% of the S&P’s upside and 50% of its downside.
This is sort of what I try to do, I say sort of. First I don't quantify it so succinctly and I only try to sort of do that when the market is in a bear phase, more correctly when demand for equities is unhealthy or questionable.
Long time reader Leisa echoed my sentiments the other day about believing in adding value by avoiding a lot of the downside or as I have been saying avoiding the full brunt of down a lot. Yesterday I disclosed having added a little SDS to client accounts late in the day on Tuesday. An hour or two into the day on Wednesday a reader said I was too early. Well maybe but the context here is trying to avoid the full brunt of down a lot which now has a higher probability than it did a couple of months ago when the market was much lower.
So in that context there is no way to be right or wrong after less than three hours of trading. It is not important how I protect against what I think the market might do but what is important is for you to figure out what you might do in case you think the market could have another big run down--even if you would do nothing. Even if you are in the everything is speculation crowd there is no reason you can't have an opinion about what the stock market might do. Just preparing mentally for a big decline with no action can help with enduring such a drop.
It seems like every time the market pukes down very few people prepared for it. A point I have made before is that recognition that there is more risk to the downside can, if nothing else, help prevent you from panic selling at the low.
For an extra money quote related to Manny Ramirez who is playing with the Albuquerque Isotopes this week on a rehab stint; in the Red Sox pregame show yesterday Jim Rice said that Manny should cut his hair, keep his mouth shut and just play baseball.