The stock has pluses and minuses like every stock and has a history of going up more in an up market and down more in a down market so it is a source of volatility. Obviously there is nothing wrong with being a source of volatility other than knowing the volatility characteristics of what you own.
My answer not surprisingly to long time readers was from a top down perspective. Given what I perceive as potential headwinds in domestic tech spending I'm not in a big hurry to use the tech sector for places to add volatility to the portfolio. There are other segments like materials, emerging markets or agriculture. I perceive these areas to have tailwinds with regard to spending as opposed to headwinds.
Obviously these thought can turn out to be incorrect but that is how I see it. Part of the idea here is that if tech stocks only do ok (or worse) be it for spending patterns or any other reason it would be difficult for a stock to go up a lot while the rest of the sector muddles. Obviously some stocks would do very well while other stocks muddle but picking one of the ones that would do well would be very difficult.Compare that to emerging market stocks continuing to do very well. Picking a stock that goes along for the ride with its group is not an impossible task. So if you do pick an ordinary stock (relative to its group) then focus needs to be given to picking the right group. Obviously the typical emerging market stock has done quite well lately so getting that call right becomes more important if you can buy into the concept of top down.
Let me repeat that easier does not mean you will always be correct but picking the one stock that skyrockets out of a muddling group or sector is very difficult to do.
Thanks for all the input about the dog situation. Diagnosing this is a process and we have unyielding faith in our Vet to do the right thing without jacking us up with unnecessary tests.
5 comments:
There's an interesting observation made by Bespoke that increased volatility in the S&P is the result of more investors making sector and asset class bets via etfs, rather than buying individual stocks. As a result, good news lifts all boats and viceversa, they conclude. That would seem to support your thesis, Roger.
volatility is something we just have to learn to live with, but I think you make a good point about emerging markets over tech stocks.
at market bottoms we should embrace volatility and at market tops it needs to be avoided.
This bull is still advancing from a low so the volatility is just something I need to accept and embrace. But it is a lot easier for me to embrace volatility with foreign equities than tech or financials
I pay a litle attention to volatility since late last year; mostly because sites like the Big Picture started talking about it.
There's so much liquidity in the last decade or so, I'm not always sure what a volatility trend means.
You need the University of Arizona Veterinary School for appropriate diagnosis. Individual vets simply don't have the specialist knowledge/tools to deal with complex cases.
Roger,
Overall are you surprised the DOW is up 4K pts from the low?? What do you see for the next few months then the 1st 1/4 of 2010??
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