The Rally Has Failed; Time for Plan B

It was a nice respite, but now it’s over. The over-arching trend of debilitating deflation has resumed, taking with it wide swaths of market capitalization from the indices. You might be tempted to bottom fish from the sewage infested waters. But you’re only going to capture sick fish, who will eventually die on you.

Might I posit an alternative stance?

Instead of repeating my errors, why not allocate funds into boring stocks that work? My largest position, as of yesterday, was COST.  It’s holding up rather well in this tape, isn’t it? Simply screen for mega cap stocks within 5% of a 52 week high and start from there.

The small cap rally that has alluded us for so long isn’t going to happen now. Very simply, after a 9% move in October, it’s unlikely we’ll get much follow through from here.

I expect the market to tread water from now until January. My job, aside from being the best god damned finance blogger who has ever lived, is to protect gains and maximize my investment dollars by limiting downside and capturing easy upside.

I just don’t see easy gains here. Biotech is down; but are they cheap?

Sure, if we knew AGIO was gonna have killer data, we’d all pile in ahead of the move. But that’s not how the market works, at least not for non-congressmen.

We make assessments and then try to figure out if our conclusions are worthwhile, based on risk/reward metrics. I’ve been rifling through risky shit like crazy these past two years, enduring savage drawdowns and inhumane periods of capital loss.

Those days are over. Le Fly is no longer interested in the Fast Money, a term coined by catamites partaking in heinous acts of degeneracy.

“The Fly” is better than them, better than all of them. You will see the fruits of my labor soon come to fruition.