Mike - I started think more about this 90-10 thing.
A little too extreme for me, but I will adapt to 80-20 or so In my IRA. Daytrade the rest.
My reply to the caution below that someone sent me.
<<You have to watch so you don't go over the deep end and your mind becomes clouded with conviction. The same kind of conviction a long gets when they can't bare to sell, happens to some shorts near market bottoms. You have to stay open minded, since the market is always right. You never know when the market will turn against methods you have been using, so flexibility is paramount.>>
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I agree, and I am watching for it.
I am also 85% cash or better.
My only PUT positions are long term puts (leaps) on financials. Plenty of time to be right. I also have mid term puts on a couple financials. (Strike May).
I think that in spite of how I am talking, this is a rather conservative position. I do not want to go nuts on shorts, especially tech right now. I will just wait till tech stalls, which we both know it will (sometime), and at that point I re-evaluate.
I am trying to be early on Puts on Financials. Look at the chart on MER. A big double top. A NYSE stock that dropped in spite of an up day on the DOW of 170 points or so.
Also note the following, which I just found today.
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Merrill may cut research jobs
By Jon Friedman, CBS.MarketWatch.com
Last Update: 10:34 AM ET Dec 22, 2000
NEW YORK (CBS.MW) -- Merrill Lynch, the largest U.S. securities firm, is planning to cut jobs at its research department in 2001, according to a report in Friday's edition of the Wall Street Journal, citing people familiar with the matter.
The looming layoffs would come as a result of a weak stock market. More job cuts are likely if the markets continue their descent, according to the report.
Richard Silverman, a Merrill spokesman in New York, said the firm would have no comment on the report other than to say Merrill doesn't react in a "knee-jerk" fashion to stock market declines.
On Wall Street, it's a common practice for securities firms to terminate employees in departments that aren't regarded as profit centers, such as the back office.
If it follows through with a plan to reduce the number of employees, Merrill (MER: news, msgs) could likely begin the layoff program by shedding people who work in its processing departments. Only as a last resort would Merrill seek to chop brokers because these are the employees who bring in revenue on a daily basis.
In terms of numbers of brokers, Merrill is the largest firm on Wall Street by a wide margin. It has boasted approximately 14,000 brokers, or "financial consultants" in recent times.
The key to Merrill's retail brokerage strategy has been a push in recent years to gather clients' assets, in such vehicles as mutual funds, which supplement its core business of executing equity orders for customers.
The New York-based firm has been dominant on Wall Street in making innovations in the retail brokerage business. Merrill rolled out the Cash Management Account in 1977 and was quickly followed by rivals in this lucrative segment by such foes as Citigroup's Smith Barney (C: news, msgs) .
Merrill Lynch (MER: news, msgs) shares fell 44 cents to $63.56 Friday after closing up $1.25 to $64 Thursday.
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I smell declining profits and a layoff attempt to hide that fact. EPS was up a surprise +10% last quarter.
Any guesses for the next two quarters?
Like I said, I smell blood, and I am hoping that blood is MER's, not mine.
Comments?
M |
