Truman and BHaulman,
Was thinking about the Money mag cover again, could just be a way to sell more magazines. Its a bit of a reach, but perhaps their sales have leveled off, as due to this extended bull market, people are starting to think, "why do I even need the magazine? I keep dumping more and more money into funds and they keep going up--this is a no-brainer--I certainly don't need to buy a magazine to tell me how to do THIS!" Hence, people see the cover "Sell your stocks Now!" and they think, "hmmm, maybe I need to read this..." Heck, it worked--I'm even thinking about picking one up, just to see their reasoning on why they think the fun run is over. Think about it, no one ever made Barnes & Noble's best sellers list by writing a book entitled, "Buy Stocks, Hold 'em, Accumulate Wealth Slowly Over Several Years." The guys who make the best sellers' lists are the ones writing books entitled, "The Coming Market Crash of 1997" where they go into all of these wacko doomsday scenarios of how the Dow will go to 1500, the US Govt will default on Treasuries, and so you should put all of your assets into gold and bury it in your backyard.
Being a dyed-in-the-wool contrarian, seeing the cover and the hype that went with it made me feel pretty good about the market. One of the smartest stock market guys I've ever known once told me, "When you overhear people at cocktail parties handing out hot stock tips...when your neighbor, who has never invested in anything but CDs, tells you he's liquidated all of his CD money and invested it into a stock fund...when you're clients and friends start giving *you* (the broker) investment advice...that is when you know the party's over." I have seen a lot of this lately, and quite frankly I was getting a bit nervous about the market in general because of it, but when Money Magazine is telling people to dump their stocks, well that's a bullish indicator to me. I guess I'd be running for the doors if instead, they had on the cover of Money, "Margin all of your stocks to the hilt and double up!" and the subtitle was "Coca Cola--Why its a Value Play @ 46* earnings..."
Truman, I enjoyed your reference to Joe Kennedy's shoeshine guy, who was so bullish that he convinced Kennedy--a true contrarian--to dump all of his stocks and go short. I don't know if you saw it, but in a recent Forbes article, the actual shoeshine guy was mentioned. Turns out, his son is the founder and CEO of some hot publicly traded company. I can't remember what the name of the company was, but it was a pretty neat article--they contrasted this guy with his dad and tried to portray him as someone who had learned from his father's mistakes.
BHaulman, I like your latest moves (going 25% cash). Who knows what the market is gonna do in the next six months, but I do know one thing--I've never seen anyone lose money by taking a profit. Besides, its always good to have some "powder dry" for when you see a special situation stock that you gotta have. Congrats on your good fortunes, and good luck with your next moves.
Gary |
