Wild, 1. Yes, no doubt about it if this turns out to be a real bear market and not just a hiccup. At the start of bears, everyone runs to "qualtiy," which is usually crap they have heard of. <g> Most small stocks died in 1969, but the so-called "Nifty Fifty" kept right on trucking until 1974, when they joined the club, bigtime. That was when you could pick up the cream of America's future for 5-9 times eps. And when many stocks were yielding 8-10% and had the eps to back it up.
2. The 1966-1982 bear market was definitely in technology. We laugh at it now, but CB radios, color t.v.s, Mainframes, minicomputers, etc. were cutting edge technology in those days. I have often talked about how I had saved a Value Line computer and computer services section from the late 1960s and all of the valuations over $100 a share. To be fair, IBM still exists at an fluff price. It didn't get its real comeuppance until the late 1980s. But I just don't see that much of Mohawk Data Systems and National Business Rental these days. <g> There were at least 40 names like that, at least 35 of which are gonzo.
The excesses of this bull mania would argue for a long, grinding bear with a huge number of headfakes. But, during the 1966-1982 markets, there was plenty of money for bulls to make. I know because I was bullish at least half of that time and puts were few and far between when I was bearish.
3. I don't really think that strategically. I look at issues in certain industries. When they are overpriced, I buy puts. When they are underpriced, I buy calls. Obviously, if all the names in all the industries I like become underpriced, I will be net bullish. That hasn't happened yet and I still have more bear spreads than bull spreads in my maximum income portfolio and more long puts than long calls in my 90/10. But, this time last year, I had no calls and very few bull spreads, so it definitely is moving that direction. |
