Jungle, JQP:
JQP doesn't much care for Jungle's posted article, which I thought was great. JQ writes, "This article reminds me of the extremely bullish articles back when the dot coms were in the good old days."
But you're forgetting, JQ, what the stock prices did when those articles came out in the good old days: they continued to rise. These have a long way to go down, imho.
These markets are not composed of numbers and equations, but rather of sentiment, raw emotion, pain and fear and self loathing and greed--the market smells like a locker room before a big game or the middle of a first year law school exam room. Right now that smell is getting worse.
I could christen it "M.O." rather than B.O., for Market Odor. The M.O. indicator is rising; send out for cartons of deodorant and eau de toilette for the ladies, fragrant powder for your wigs?
There is a mistake in investing I call "getting married to the numbers." In its narrowest form it means buying based on a specific set of numbers: p/e, price/sales, book value, earnings estimates, insider buys or insider sales.
A little bit broader and it means buying based on macro numbers, fed easing, book to bill, previous cycles, etc.
In the broadest sense it means attaching oneself to any particular theory with any stock or group of stocks. A friend of mine simply could not believe that a stock which had been 60 and was now 18 wasn't a good buy. He read all the reports, crunched the numbers, looked at the estimates, called the CFO and bought the stock. He bought again at 12 and again at 8 and again at 5. He finally sold when he had wiped out all of his not insignificant gains for the year.
My friend, you see, had married the numbers and, in so doing, gotten into an argument with the market. Guess who won that argument? Guess who wins all the arguments?
The point of Jungle's article is that, just as there were different rules in the bull bubble, there will be different rules in this bear rumble. It's just my humble opinion but it's as clear as the nose on my face. As Dabum advises, it's important to listen to the condition of the market.
Looking backward from 5 years from now today may be a good time to establish positions in several stocks, or index funds or the market as a whole. But I'm not going to get in an argument with the market on this last day of August, no matter what signals the TRIN is sending up, because the market is saying bad storm ahead.
I'm pretty confident that there will be a very nice time to buy during one of the last quarter months, perhaps as early as Halloween or as late as Boxing Day, and that the VIX will whisper in my ear when that is to be. Until then I believe I'll be short and ride out the inevitable head fake rallies.
Speaking of rallies, OSX in the 70s, NBR (my wonderful NBR!!) at $24??? I WILL be a buyer of NBR again, some day. That ride from $22 to $60 was just too much fun, but I will await a chart based signal and, based on what I see now, it could be a teenager ($16?) before I place my bet.
Just some rambling thoughts as the Naz can't decide which century it wants to be here.
Kb |
