Yes, sadly, I have a hangup about valuations. Funnymentals. I really, honestly, am an investor at heart. I like to buy good, growing companies at a reasonable price, and sell them when the risk/reward turns too poor. I have no qualms about reversing the strategy when a secular bear is on: selling expensive, poor risk/rewards, and covering later.
I use TA to time entries. I never fade a stock hitting new highs. I always short after a top has formed and a retest is on. My big problem right now is the rampant stupidness doesn't look quite as stupid as 2000, so it's tougher to pull the trigger and get short. Virtually all the companies trading for >15X sales now are biotechs, and I have a tough time understanding them or exposing more than a small portion of my portfolio to them.
The financials will be a good fade one day soon, but the momentum hasn't turned against them yet. The ripest area seems to be tech, but if you really did get somewhere close to 2000 all over again in terms of earnings and valuations, then they could go a little farther. I have pretty serious doubts that it will happen, but if other people *think* it will happen, they will bid the stocks back where they were.
Liquidity can do some strange things...
BC |
