I am up late toying with the idea of selling half my portfolio tomorrow. Even though there is no stock in my portfolio I consider fully valued. And if I did that, I would have to sell many at well below what I consider fair value. Before you call me nuts, go back to my posts last July and tell me what is different today.
The market breadth and the action in a few highflying stocks looks just like last July just before the market tanked...which if you look back is the last time I said something like this. But interest rates are what really worry me, just because everybody is pretending they're not a problem. Interest rates were FALLING last summer as the market tanked. When the market is trading at 25x earnings and earnings are not growing, rising interest rates are a big problem.
After getting 75% of my money out of the market last July and buying a house, I gradually got sucked back in with a smaller portfolio. Now I am fully invested and wondering why. I can find plenty of stocks I consider cheap, but I learned last July that they will drop too, maybe even more than the expensive stocks. I have a very hard time finding a single "blue chip" that I consider low risk. And the speculative froth on the internet stocks has fallen, but only to the level of a month or so ago. These have another 75% to fall before they could even be considered as intelligent investments. If I make the move tomorrow, it will be impulsively, but it will be a well thought out impulse. If I do it, I'll make the call here. I'm not quite there, but I'm close. So take this as a gutless - for now, the market isn't open - call of a top - Dow 9366. When I post that I've done it, that's my call.
JJC |
