I am becoming increasingly cautious as this rally is now sustained on the backs of defunct maritime shippers, the airline industry, and pharmaceuticals. Most of this trash would never be permitted to find its way into my holdings.
As summer sets in, the theme will settle on a single discord: disappointment.
The other day, I had a family gathering about 100 miles away. Along the trip, I counted almost 300 acres of land for sale at “NEW LOWER PRICES”. This is what I saw along my way; I didn’t go out looking.
There is a shadow inventory overhanging this market, and the chord that is holding it up is made of the ability of an aging Baby Boomer generation to tolerate pain and discomfort – two things which that group of whining malcontents has never been particularly prone to enduring.
And Europe continues to circle the drain in a slow bleed. You can stop looking for the inflection point, where suddenly everything starts to become increasingly easier and growth picks up. Thanks to binging on positive carry trades for two decades the system has been made recalcitrant and calcified. The arteries are hardened and strain for blood flow.
Thanks to my maneuvers in the Fall, I’m up 21% since November. Yet, more than half of this is contained in just two positions forcing higher by large margins – CCJ and BAS. It could all vanish in a hurry.
This is why I pushed to raise 30% cash recently, although my exposure to CCJ and BAS remains extreme. I have faith in these two positions; they will continue to benefit and outperform remarkably over the next few years. But the swings will be gut churning and disruptive.
Factoring in EUO, my net artificial cash position is closer to 40%. If we crater, EUO is going to spike (more than it has been). I’m also treating BXG like a cash position, as there is an all cash offer (even though I’m hoping/expecting the deal to fall through). That puts me at ~45% cash.
I’m almost ready for the fireworks to get started.
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My good man….Do you know any of the people on this council? Are they really as disconnected from reality as their actions would seem to indicate?
http://news.yahoo.com/detroit-council-appeals-fiscal-emergency-183856999.html
Not personally. But yeah, they live in a parallel universe where good is bad and homeless people make excellent council…
Fly is such a clown amateur – selling his HLF position. The FTC has/will do nothing. More headlines perpetrated by Ackman to unload his short position. This will pring $50+ soon
What kind of show is this? Such disrespect for the men who tend these halls and keep our hearths warm?
The Fly is very much not an amateur – I’ve had the pleasure to meet all the good people of iBC (sans the newer additions) and they are of esteem and professionals.