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Strategies & Market Trends : Waiting for the big Kahuna
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To: Ibexx who wrote (1918)7/3/1997 3:55:00 PM
From: Stingray   of 94695
 
If you want to invest money for 2 years and can get 5.93% on a 2 year note, you would only go for the 12 month T-Bill yielding 5.5% if you think that in 12 months time the rate would be 6.36% or greater (the average of 5.5 and 6.36 is 5.93), i.e. the Fed will have made 3 raises of 1/4%, so I don't see this as proof that the market doesn't believe rates will rise, although the fairly flat yield curve does point in that direction.

I'm putting some money in 2 year notes myself because I can't see anything that looks real attractive to buy right now and I think that there's a 50/50 chance that the market will be lower then than it is today and I'll be able to pick up some good stocks at reasonable prices.

I think that the market is overpriced and I think it is as likely to end the year at 5000 as it is at 10000 but I figure that the easiest way for me to make a downward bet is to liquidate stock on the way up, I now have only around 25% of my investments in stocks. The funny thing is that the market keeps going up, I keep selling stock and the dollar value of the stocks I have left doesn't seem to change (I sold a bit more today). This bull market seems to be the gift that keeps on giving if you are long.

I am getting intrigued however by December puts on GE, they seem awfully cheap. If this market keep on rising I might just have to buy me some.
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