Jim, you missed the key phrase -- "can value stocks bought now
give you a positive return?" I do not have a significant cash position. However, of recent sales made, virtually all of the money has not been put back into stocks. I do not believe in buying the hot stocks because I expect a bigger fool to come along, and I am skeptical that small value stocks in general will get a day in
the sun before a more substantial correction comes along.
I generally do not subscribe to overall market strategy theories, but I have two I like. The last thirty-two years can be split into two roughly equal periods -- the first, in which stocks made zero progress relative to average returns over extremely long periods (of about 9-10%), and the second, where stocks had nearly double normal returns. I think we are soon due for a possibly long period of substandard returns.
My other observation is that you can stick a chart of the Dow almost perfectly on top of a chart of the Nikkei, with recent Dow highs matched to N 40,000. I don't know how high is high, but my inclination to buy stocks with new money or proceeds of sales is rather low. It is probably the fun I have more than anything else that keeps me from being an aggressive seller and, altho I have a lot of money in the market, I do not need it to maintain my standard of living. |
