Calm Down; The Market Sucks

Late in 2007, “The Fly” predicted we’d be down 15% in 2008. I stand by that prediction, and more (if that makes any sense). We are likely to “enjoy” the bigger sized losses in 2009, as industries from planes to autos say “see ya later, I’m gonna go ahead and file for bankruptcy.”

I told you “The Fly” was on the verge of making his second best market call of 2008, via timing the banks with NASA-like precision. Right now, I have a 15% cash position and bountiful energy plays. My only short positions include a very small piece of [[SKF]] , Vulcan Materials Company [[VMC]] , Legg Mason, Inc. [[LM]] and Pzena Investment Management, Inc. [[PZN]] .

Look you, I’ve been in this business for awhile now; and I pay attention. Some people just go through the motions and enjoy their money. I, on the other hand, would stay in the office, studying the market till 11pm, while my colleagues were out getting drunk and doing lines of blow off bar stools.

The market cannot be trusted during August-October. If you believe the market has “bottomed,” because August was fairly decent, you are delirious.

Remember, mutual and hedge funds have been boot stomped this year. That will not be resolved smoothly, when the quarter ends and people want their money back. And, don’t forget, companies will begin to warn of earnings shortfalls, sometime very soon.

Finally, the banks are still broke. They need to raise more capital. Anticipate a flurry of dilutive secondaries to hit the tape, within the next 4 weeks.

With my money, I will keep my cash position at 15%, maybe nibble on some [[DIG]] and [[IEO]] , should it dip some more, and prepare to buy some serious rib eyes for a BBQ “The Fly” is hosting this weekend.

NOTE: None of you are invited. So sorry.