Yea time is getting really short for my boy Rainwater for his buddies and CNBC to pay him a tribute he must be in the coffin. ARLP have not had the energy to do much reading on that name but plan on doing it when I get some energy. I believe if you buy the right names in solar you will do well it is just what are the right names. I have no idea which ones are going to be around in the years to come. Yea oil falling to 60 or lower and what you said on NGL is on my mind. Really if you think about it is pretty clear that oil has no business being over 100 with NG and coal being priced the way they are so something has to give. Short term I think we very well could see 60 or lower before 200 it really all depends on the global growth story growth @ a decent percent we go higher or the wheels falling off look out below. Also, the S&P being @ 4 year highs and coal/NG stocks being already close to lows is on my mind. What happens if we get a nice correction cheap will most likely become even cheaper look what happened to III.to it went to .93. Then the macro guys that have been dead right are super bearish. Prem Watsa talking about Ben Grahmn saying he almost went bankrupt statement will not get out of my mind and his hedge on deflation. The similarities to Japan and the depression to the times we are living in right now are so similar it scares the poop out of me. I actually have it memorized, but here is the cut and paste from Gurufocus again
You're a Ben Graham fan right? So Ben Graham almost went bankrupt in the ‘30s, and this is an interesting point, I keep thinking about this all the time, so Ben Graham was reflecting in the ‘30s and he writes, if you were not bearish, if you're not concerned about the economy in 1925, not in 1927, 28, 29, but in 1925, there was only a 1/100 chance that you survived the depression, because what'd you have looked at was if you were not bearish in 1925, you'd have seen the crash in 1929, drop 50%, and you'd have come right in and thought of it as an opportunity, because the Dow Jones dropped from 400 to 200, went back up to 300, and the second leg after that was a killer, dropping about 90%!! That was a worry, a lot of problems at the time, and I keep thinking of that because the second leg, I have seen in many industries, oil drilling and farm equipment, that second leg can be vicious, and we might well be entering that second stage.
That's what you have to be concerned about, I'm not saying that will happen, I'm just saying a reading of history, of the ‘30s and of the Japanese environment of the last 20 years, should get one cautious, because of course at that time people didn't expect this either, they didn't expect what happened. And there are a lot of similarities. For example, 0% interest rates, we haven't had that since the ‘30s, those types of interest rates. Ten percent deficits, a 10% deficit in the U.S., you have to go back to that time period to see 10% deficits year after year. In Japan, for example, we were quite fascinated by the fact that when interest rates went from 7-8% in 1989-90 and dropped in the next ten years below 4%, 3%, 2% in 10-year Japanese Treasuries, and then eventually went to 1% where they are now. Seven out of the ten largest Japanese life insurance companies didn't survive.
Then you have Goldman saying now is the time to buy stocks like 2 weeks ago that scared the crap out of me even more. How can you say that when we are @ 4 year highs and a market driven by what our leaders are going to do next and future returns looking to be in the low single digits. Okie now is the time to buy stocks because Goldman says so after a 110% rise. I agree stocks will do better over a 10 year period than cash investments but we are going to have a meaningful correction @ some point during that 10 year period and most likely within the next 2 years so no reason to be ballz to the wallz in equities. Then we have Bob R and Jimmy, Grantham and Faber all extremely bearish. These are the macro guys who have been dead right so why doubt them now. Then that video I posted with that guy that made sense but does not have any idea where to put his money in either just trying to preserve capital. If he really believed this rally will continue for another 5 years which I serious doubt, and if he was 100% confident it lasting another 5 years why not be 100% equities. I just don’t feel comfortable in this market I really don’t know what to do and that is the reason for all the aggressive moves lately. I think until there is more clarity it is better to be really conservative. As I am writing I bought some L 38.80 and TSCDY 15.36 and cut my position in ANR and JRCC to a more reasonable amount of 5% each as they are up today roughly 2%, but what I sold the losses were in the 20% range.I am trimming down everything this week plan on being 40% cash and having a much less concentrated portfolio. By the end of the week I want to have a portfolio I could feel comfortable in any environment it is more about preserving my wealth than getting 100% returns going forward until my Macro guys inform me it is safe. So by the end of the week I plan on being 30% (Buffet/Yackman like) and 25%(spices) and 5% ST play money and the rest cash until there is more clarity. |
