Excerpt from Martin Barnes interview on Barrons this week--what he says here is also my personal view of the Market now----
<< Q: Exactly. What's a rational stock-market investor to do?
A: Do you have to ask such difficult questions? Maybe it's not implausible to
assume that this bubble is going to keep inflating as rates come down. People
will keep feeding money into the market as long as they don't see rates rising,
so why not just jump aboard? All I can say is that if you want to play that
game, be aware that you're playing a bubble market. Don't try to kid yourself
that you're somehow investing on the basis of fundamentals, that valuations
are okay. Understand that by definition a bubble is vulnerable to shocks --
and they do burst. You have to be very nimble; don't deceive yourself. If you
can post that sign on the wall, "It's a bubble, stupid," and believe it, then go
for it. I'm, of course, assuming you have a high tolerance for risk. But most
investors, I think, should have low weightings in equities in this environment. It
may be that we are making a huge rolling top in the market. The stock market
didn't make much headway between '66 and '72, but it was a wild
roller-coaster ride. Maybe that's what we're in for. Maybe we're back to a
point where timing the market is crucial; maybe our buy-and-hold days are
numbered. Maybe this becomes a stockpicker's market, where the rising tide
doesn't lift all boats. I just don't think we are in a whole major new up-leg that
is going to sustain risk-free, double-digit returns.
Q: If we're stuck in a multiyear topping process, what's the likely trading
range?
A: It is hard to put numbers on it. My point is that, to make money in that kind
of market, you really have to be in and out and in and out.>> Amen to that--Max
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