Dale Baker
I believe I have seen evidence that periods of extreme overall insider selling tend to be followed by periods of down to flat markets. Similarly, I have seen & believe evidence that when many investors are optimistic, it pays to be the opposite.
Combine the above with my inability to find the kind of buys that I find compelling and it makes me wonder if I should not take it a step further and look to further lighten up my overall equity positions in order to have more cash available for when both overall and specific situations appear more favorable.
I believe a rising tide lists nearly all boats and vice versa. Sure, a few stocks might react otherwise but I doubt my or anyones ability to consistently choose those stocks that react favorably to any market environment.
I disagree 100% with your statement that I am mixing momentum market timing with value investing.
I agree that value investors dont follow the herd. Indeed, the herd is BUYING stocks that the ultimate value investors (insiders) are selling them.
I am suggesting we go opposite of the herd and take advantage of what may be short-lived market highs to lock in profits that we can later use for buying when more & better opportunities present themselves.
Are you suggesting that value investors must remain 100% invested or nearly so at all times ?
I have the largest cash position than I have ever had.
I am not contemplating placing a market sell order for every position I own monday morning, but as value investors, I think we can & should factor our overall view of the market in our decisions.
In other words, I know that WHEN i find stocks to buy, I can often find a lot of them. But if I have limited funds, I cannot buy as aggressivly as I might have liked.
It may well be that later in the year we have a number of situations driven by tax loss selling or whatever that create buying opportunities. If I was fully invested, I would not have cash available to take advantage of those buys.
I am not suggesting that I or anyone can perfectly time the markets, but we can zig when the majority are zagging. We can sell when the insiders are and buy when they are buying.
I view both as extra wind at my back.
Alternatively, If I am fully invested at all times, and come Nov. the market is down significantly and there are a number of stocks i like, I would be in a position of HAVING to sell an undervalued stock during a period of market weakness in order to buy another.
I appreciate your comments despite the fact that they surprise me and we disagree. |
