Regarding ALLY, I was a big cheerleader for that several dollars ago and got no response on this board. I just sold my final shares of ALLY on a huge run up in the stock, deteriorating credit performance on their Auto Receivables Trust, and a recent downgrade by Sandler O'Neil. Sandler just downgraded it to hold, which is maybe what I should have done. However, with a fairly valued stock, I don't feel like keeping on the significant risk that auto loans entail.
Through the years it seems to me like some value investors feel compelled to jump on the bandwagon at times (out of peer pressure) and then later end up jumping off the bandwagon a year or two later at much worse prices. And for some reasons, when I am pounding the table on a stock that seems super cheap, I often get no response and then later people pick up on the stock. It must just be false optimism, but nowadays I view no response on a pick as a good contrarian sign :)
Regarding staying in/out of the market, I would recommend sticking to one's guns, but staying humble about the market prognostications, as it is very difficult to forecast the market in the short term. In most cases I am against decisive actions such as moving to all cash or leveraging up. A little tactical rebalancing here and there (more cash in expensive periods like now) seems more reasonable to me.
MC |
