TR,
Maybe I am getting ready for some "real" bear action.
It is funny the little things that will cause you to crystallize your thoughts.
Last night a friend called me up and wanted to, <talk market>. He has an idea and while he is a very, very bright guy in the 3D world, I was struck by his complacency towards general risk. He kept saying, "well that can't happen". And I, playing the devil's advocate as I'm likely to do, kept asking, "why?" like the proverbial 3 year old.
His answer, over and over, was the wall of liquidity being forced upon us by the (terrified) Fed.
And what was his great idea? Simply that miners could not possibly lose if you didn't use margin.
I actually do agree with him in the long perspective, but I strongly disagree short term.
And I wondered, do 99% of the traders/investors really believe that flood of money actually trumps earnings and P/E's. Do they REALLY believe that, or are they just riding a wave that they know will break sometime before shore?
And my hunch was, this whole QE thing is going to fail sooner than we expect. We are already seeing it with the recent trickle of earnings shortfalls. A weak holiday season, a failure in Euroland, a little delay on the tax cuts for the many or for the rich, and boom, we could have some serious down.
Because, if it CAN'T happen, it most certainly IS going to happen.
I think PG has the right idea, and maybe it is time to allocate some funds just for some broad bear poots and just wait for it.
GT
TH |
