rjm2, agree with you that aggressive insider selling is troublesome. Chart of major indices (COMP, SP500, RUT) are showing signs of topping out.
On positive side, treasury bonds sold off significantly, as we all know that Warren Buffet sold 9B dollars of bonds. We may expect the herd following him continue to sell bonds, those fresh cash need some place to invest - and it may continue to pour into stock market.
Some survey says investors are optimistic on stock market. Depends on the survey happened in what "circle", the result may not be the same. I do see many newsletters being very bullish in the past couple months, and they were proven right. But when I talk to my regular friends who are not investing pros, most of them are still on the sidelines, showing some interest in stock market due to the recent rise, most of them are bragging about how their houses appreciated in the past couple years, in the range from $50,000 to $200,000 in 5 years. Many firmly believe that their home price won't go down, or if they go down, they won't go down much.
I am still holding many deeply undervalued stocks bought in the past 12 months. I did unload some of them that became fairly valued, and bought some small tech companies that survived the crash and demonstrating 10% sequential revenue growth. I am also taking some short positions (such as SPY) as a hedge. I am currently 65% net long versus 100% net long 3 months ago. I have been wrong in the past so I may be wrong this time. But some hedging is needed to ensure my great gains in the past year don't just go away. |
