Volatility marks tops and bottoms
As bearish as I have been for the last year, I am starting to think there is a possibility that the volatility we are seeing (incredible) is actually close to marking a bottom, at least near term. I am just waiting for the final dump of the over-owned, analyst pumped stuff so we can get on with a new market based on value, and I think we are getting close (but not quite there yet).
There are still some beautiful charts in the energy/oil stocks offering good entries. Small cap value funds and europe stocks look good. The true value of utilities for example, is just now being recognized for its importance, water, gas, oil, electricity (they are all being dumped right now). There is more to the market than CSCO and INTC, these are the no brainer stocks of the last decade, and the no brainers will continue to chase the over-owned big cap technology stocks of the past. But there are many exciting small companies which will lead in the future, not just in technology, and not just in the US. I believe some of the best returns in the next year will be in foreign stocks and small companies.
The biggest problem in the US right now is still credit/debt levels of large corporations/banks and individuals. This needs to be flushed out in order to move on, we cannot move up until the credit gets flushed out, and people start saving some money besides having it all riding on the stock market.
Small companies with real earnings/strong balance sheets and in important sectors like energy, communications, utilities, transportation, and even technology, will shine going forward. Forget about the CSCO's of the world for now and look outside the box.
I think averaging into sector mutual funds in some of the above mentioned areas is the best way to get invested here for the future. The volatility of individual stocks is too high for anything other than day trading, and will continue to be that way for some time.
I just want the VIX to spike to 60 please <g> so I can get bullish again.
M. |
