Eric, I never get out of the stock positions completely.
So, in that sense, I almost always hold through the
weekend:)
But, I do see your point. I manage the situation like
this mostly by stock/cash balance allocation. Today,
I am 100% on stocks, but may sell some 15% positions
tomorrow. If we get to 4000 level, I may consider
a 35% cash position.
As for mideast crisis, remember there is a possibility of
war, yet there is a possibility of peace. No one knows for
sure. Those "war is imminent" kind of posts are pre-mature.
If we were at 5000 level today, I would definitely sell 80%
positions because the upside potential of the market is not
enough to compsensate even a 40-60 chance of war/peace (BTW,
I was 50% in cash in March without any such negative
sentiment in market).
But now, we are at 3000 level, and I think the upside
potential is enough to compensate even a 60-40 chance of
war/peace. Even if war really breaks, doesn't mean all
Arbas countries will take side with Arafat, doesn't
mean economy will definitely go into recession in 2001.
And my belief is still that the only thin this market has
not prepared for is a recession. Anything else, 3000 level
is a good place to be.
One last thing, I think the only people who are nervous
right now are those who hold all stock positions from 5000
to today. For some people who claimed to have shorted this
market all the way to 3000, covered, now all on cash, give
me one reason why they wouldn't want to put at least 50%
of the cash into stocks right now. |
