Hi Rob, I'm sure when you review the statistics of the majority of mutual funds and compare them to your results, it will help to put a smile back on your face.
If one of the worst years in recent investing history passes with having just modest declines in one's own portfolio, then we know who has won. In major battles sometimes it's necessary to do a body count just to determine the winner! In a losing year, everyone usually has losses - that's why they call it a losing year! However, if there's even a hint that any of our inventory still has value in the year ahead, your warehouse net worth is going to rise.
The Idiot Wave is telling us that we're in one of the better times for long term investors. We haven't seen such reasonable prices for equities for a long time. If you feel there are items in the warehouse that don't merit long term waiting, then maybe it would pay to close out that item and consolidate the remainder into one of your better inventory items.
There will be rewards in 2001. There will be winners and losers. If we manage our inventories as carefully during these more trying times, when the next rally comes we'll be very pleased. Remember that AIM was really built for tough markets, not the cushie ones we've had in recent years.
I'm personally very excited about 2001. We're entering the year with the IW at one of the lower readings that we've had in many years. We're actually BELOW the long term average value of 41% Cash Reserve. It may not feel like it, but it's a cause for celebration. Last January we entered 2000 with the IW at 50% Cash Reserve and watched in near panic as it rose to its highest level in 18 years of data (60% Cash in March)!
Deep down we all knew the Phoenix was flying way too high. The IW was only one clue. Well, the new bird is growing and although not ready to take flight, is feathering out nicely.
Happy New Year,
Tom |
