Look at your calendar. It is the end of the month/quarter/half. What gets done? Portfolio adjustment because its been a generally shitty quarter.
Is there deflation? Yup. Are we Japan? Yup. Are things tough? Yup, they never got much better for anyone except the recipients of the cash–the banks.
Will the government stop last year’s plan? For the moment they have. But if you think the game is over, you would be wrong. I’m not telling you to bet the ranch, but I bet we see SPX 1090-1100 before we see 950…
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The PPT spotlight was just sighted over NY, the printing presses are in warm start mode and the paper trucks are lined up outside the fed’s truck entrance.
I’m loading heavy for a quick pop to 1100 then planning to flip for a ride down to 865.
Why make a risky play for 50 points on the SPX, (a 4.8% move), when passing on taking a 20% gain in OII in a 2 1/2 week time period?
If one isn’t willing to book 20% gains in a short time period of just over 2 weeks (in this volatile market with the 50 MA & 200 MAs rolling over in all the major indices), and instead plans to “accumulate” stocks over a longer time frame, then I don’t understand why you would care if the SPX bounces 50 points from here.
Not being critical, just trying to better understand your investing mindset.
Todd…I know the market is scary when it going through a corrective process–especially one that is as long overdue as this one is.
The reason I didn’t lock in my profit on OII, for example, is I know I can do better than the initial bounce. After all, it fell from over 68 to 40 where we jumped in. I am willing to ride out correction in stocks I think are too cheap given their current prices. It is really that simple.
Sometimes I watch a profit turn into a marginal loss because I want to hold my position and sometimes I hope to average down. My tactics at this time are not swing trading but rather position trading. That is why I’ve only bought 1/4-1/2 positions. In fact, I hope OII tests 40 again because I only bought a partial position.
I am in accumulation mode and am picking my spots carefully. It’s not perfect but it set me up for the coming QEII without being forced to chase.
Well said, Scott
Scott,
I respectfully disagree with the notion of allowing a 20% gain to turn into a loss as an investment strategy, and then suggest averaging down thereafter. Investing/trading in the markets is a tough gig. 20% gains do not come by that easily.
Having OII and AIB move up 20%+, and not booking gains, and then subsequently allowing them to drop back is a very poor investment strategy, IMO.
No disrespect intended as it certainly appears that you have the best of intentions. But guiding people to not book 20% gains in this type of volatile market goes against sound money management.
Just one person’s opinion.
A Bernanke Fed will most likely triumph against deflation. This will happen even though the rate of ‘inflationary credit expansion’, the kind inherent in a fractional reserves banking system which pyramids bank deposits, is indeed declining. At this point however, despite the fact that the Fed has flooded the banks with cash and significantly increased the money supply, we are seeing an actual strengthening in deflationary forces. The reason for this is because the banks are sitting on the cash in the form of excess reserves. The Fed understands this and once the next panic sets in they will combat it through the purchasing of non bank assets and other secretive and nefarious direct cash injects. This will most likely lead to near term stagflation and the eventual crumbling of all global fiat currencies.
Yes Scott, we will trade our way to Armageddon. Too many people over thinking this.