I've been out of touch for a while, but I'm with Mike. Unlike Mike, I sold almost everything near the top in May-July. But also unlike Mike, I sat on my hands while he called the bottom and bet huge on his call. So we probably came out even. Both up single digits for the year.
But I agree with him now. This market is in my opinion MORE speculative than it was before. Because now we KNOW that earnings are in decline. Check out those internet stocks today. That was my sell signal in the summer. Like I said then, the market will be a value buyer's market when Amazon trades in single digits. But on the other hand, unlike the peak five months ago, there is some breadth now. Value stocks are going up too. Small stocks are going up, although what I look at is sputtering now, while the Dells and Amazons are starting to fly again. Deja vous all over again? In my view, this is the final gasp of this bull market and possibly one of the great bear market selling opportunities in market history. The numbers support the valuations even less than they did in July, because at that point earnings might decline, but now they are declining. How the %$&* can you pay 25x a declining earnings stream for the S&P? I don't care what interest rates are.
But I did put my cash to work. On Sunday I bought my dream house with the money I took out of the market in the spring and summer. That'll keep me disciplined. Nothing like having no money to keep you from buying stocks. I figured if I can buy a house now at 7% interest rates, do it. Maybe it will interest people which stocks I actually own now after the big sell. I have my name associated with a lot of stocks I no longer own
ABK, CMH, LHO, USU, NH. That's it. Down payments on houses suck. But I really don't think I'm missing any big opportunity now. Taking a mortgage at a 7% interest rate is some form of a value investment in my view. Anybody willing to put up money on a side bet that I will get a shot to buy stocks with the S&P at 750 or lower within the next three years?
JJC |
