John,
As of yesterday's close, I was up to 24% cash. If the market turns down, I would start buying in widely-spaced increments (with AMAT, starting at 35), planning on using up my cash by the time the Nas retests recent lows (1400), and being back to 40% margin only if the Nas hits 1000. At today's levels, after a 56% runup in the SOX, I think the downside risk is at least as big as any potential upside. Market sentiment now, is the same as at the tops of the January and May rallies, pricing in a sharp upturn in fundamentals 6 months out.
The reason I could take advantage of the September panic selling, was because of what I'd done in the prior rallies all year (selling them). If I'd gone into 9/11 on margin, all I would have been able to do would be to grimly hang on, and hope I avoided a margin call. I didn't see 9/11 coming. I didn't time that, you can't. What I saw, in May and June, was a market priced for the most optimistic possible year-forward scenario. |
