Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Grommit who wrote (44786)	10/7/2011 2:16:52 AM
From: Spekulatius	Read Replies (2) of 78661

I decided that the market will drop for awhile longer. Duh, what took so long? So I sold a lot of stocks to raise cash, and I will try my hardest not to buy anything for at least a month. If I am wrong, that's OK. I am starting to reduce my risk exposure, in particular oil stocks. This is not a valuation call but a macro call - I do not feel that good about the market either. We had a growth scare in 2010 but this time feels different. My concerns: Austerity moves in Europe and US will suppress growth ECRI report points to recession (priced in?) Europe (partly priced it but may get worse). China - slowdown and possible credit crunch The latter could become a big deal and is not priced in. A moderate slowdown probably is but some reports seem to indicate problems in financial system that could have serious consequences, imo. The problem is the shadow banking system that seems to drive the hot real estate market and keeps companies alive that would go into bankruptcy in other countries (China does not have a bankruptcy as we know it). While this shadow banking system may not be a problem by itself, it seems that the shadow banking system itself obtains it's funding from the regular financial system via trusts that are owned by life insurance companies and regular banks. The exposure at this point is unclear and that is what scares me. If regular banks get associated with this and hold bad paper, we could get into a 2008 post Lehman type situation starting from China. Experience shows that it will probably radiate out from there and might be hard to contain. I am not stating that it is bound to happen but it's a significant probability and will cause considerable downside. Looking at the supposedly safe Chinese bank stocks it occurs to me that something does not smell right: finance.yahoo.com I am not selling indiscriminately, but I decided to reduce my exposure to the energy sector on this upward move and particular those stocks that I have been overweight in. I expect at least more of a See-Saw market with opportunities to play volatility and in the worst case another leg down.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next