Agreed. I would remind everyone that it's OK to simply step aside in places where you do not have a strong advantage. I personally see plenty of overvalued stocks in technically precarious positions, but I also see the possibility of a serious general market rally. So, what do I do? Short the stocks that I see going down more than the market, and hedge with SPY/DIA.
Also, I saw a post a few days back (was it Denning? Bonner?) that reminded us that the market should be a tool for our use, not the other we around. When the market is our master, we have lost control. We must be the masters and use it to our advantage.
I felt that the risk/reward was pretty darned good fading Monday's rally, so I did. I'm not so sure here, so I'm trying to just stay away from it. Opportunities will come again in the future - maybe not today or tomorrow, maybe not even next week, but they will come. And an investor with the appropriate training will know what to do when the time comes.
I'm ecstatic to see yields on corporate debt surging. When we get done deleveraging, there will be the opportunity to lock in nice yields after inflation, and not have to worry nearly as much about stocks. We just have to realize that it could be a long way off, potentially many years. Patience will be required, and there is no rush.
`BC |
