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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: TH who wrote (14782)11/3/2004 9:45:09 PM
From: CalculatedRisk  Read Replies (2) of 116555
 
I think the market would have rallied today no matter who won (the rally might be over or it might last a few weeks - who knows). But I'm avoiding short positions until the situation becomes a little clearer. The Bush supporters tend to think the economy is picking up and they will be investing based on the news of Bush's 2nd term. Many of those that are concerned about the levels of debt in America (public and private) probably supported Kerry and might consider shorting stocks. However, since far more people invest long than short stocks, this “good news” of Bush’s 2nd term might provide a decent rally.

As I recommended on this thread last week, I bought calls (OEX 545s) and took my profits this AM. If Kerry had won, I probably would have let the calls run.

As far as investing right now, I am once again mostly on the sidelines. I think 2005 will see a slowing economy and larger than expected deficits. As the bad news comes out, there will be plenty of opportunity to short as investor psychology changes. I know cash is hard to hold with low interest rates and underreported inflation. But I am holding cash anyway.

For most of my life, I've been fully invested. Since January 2000, I've been mostly cash and short (except for some long positions last year based on FED monetary policy). Have I grown too cautious as I've grown older? Or am I really wiser? Time will tell. Damn, I like investing long ... can't we bring back sanity?
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