My issue with table pounding is one of obscuring the issue of time. It is not unlike trying to understand what analysts are REALLY saying about their stocks. When a downgrade occurs on valuation the stock typically is priced down so immediately that the analyst is tempted to reverse the downgrade by 9:31 am. Until the analyst is talked to or at least the report is read, one can't know if he is talking about a one quarter issue, a valuation issue or a real secular market change.
In your case slider, on one hand you are trading small moves in stocks, taking losses, taking profits, buying puts, selling calls.....on the other hand you are making a huge secular call on the world's economic direction and the investment scenario appropriate.
On may 18th, I disagreed with your gold call based on reason elucidated in that post. At the time NEM was 24. On Oct 17th I noted I was now making my first gold buy, which was nem at about 15. I agree with your message, I just think you are too far ahead of the curve, meaning you foul down the left field line no matter how hard you hit it. I am just not nimble enough to trade from 24 down to 14 and still make money although it surely can be done.
The investment call now, is balancing the market's reaction to the prospect of lower interest rates on the horizon against the prospect of significantly slower global growth. Slower growth means earnings deceleration which bodes poorly for technology, although the short term technical indicators are sufficiently bullish that I am hoping to play a short term naz spike on the long side one more time before shorting momentum for 2001. I may be wrong trying to squeeze one last bump out, we'll see. So far it's been a zero sum game.
Falling interest rates undercut one of the legs of the tech boom and the old economy bust. So what to do, what to do?
Last year at this time I decided the themes of 2000 were Energy, Optical Equipment and Semiconductors. Sadly I stayed with semis too long and undid much of the good that had been done.
For 2001 it is Ten Year Zeros, Healthcare, Financials, dippy Energy and Telecoms as financing fears abate. Gold? The high non-commercial short position will lead to eventual covering rally. The current Price to NAV of equities versus gold is .85 suggesting intrinsic undervaluation. But it is the impending dollar drop which will power gold upward and THIS I believe won't happen overnight. There have been a number of attempts to move the euro up thus far without success. When the euro gains some bullish attention I will THEN begin to add to gold holdings in ernest.
mt |
