Excellent post. As you are, I am 90% cash, buying only oversold stocks such as CANI, FRNT, IDTI, that I can hold and ignore over the next six months. The paradox of this market is that as the tech stocks have been decimated and money has flowed to defensive sectors, they have become richly valued and ripe for their own bear markets.
For example, Pfizer(PFE) has a PE of 75 with a projected yearly growth rate of 25%, a PEG of 3!. Even many of the former tech high flyers did not have PEG's this high. This is true throughout much of the healthcare & pharmaceutical sector. The retailers have also reached unsustainable PEs. Many have had 50-100% runs since last November, yet they are NOT growing their earnings and many now have PEs between 20-35.
For these reasons, money is best kept on the sidelines for sniping on the short side or buying stocks which become oversold due to analyst downgrades. |
