Market thoughts: -
"She bent, but she didn't break" - that's how i view the phenomena of the first week in January. I mini-panicked Thursday afternoon, dumping some so-so gorillas (oxymoron?) and lightened up on some stocks that i had a bunch of. But most important, I DIDN"T sell the stocks that i relieve believed in (YHOO, QCOM, CMGI, JDSU, GLW, etc) AND I sold off the non-performers that should have been kicked out of bed a long time ago. Took losses on duds. I did a real quick evaluation of the stocks and sectors I wanted to be in, not that I was in, and made my keep/sell decision based on that.
In hindsight, I should have doubled down on YHOO, QCOM, CMGI etc at the bargain prices, but haven't gotten that disciplined yet.
This did two things for me Friday morning. A. I had fresh capital to redeploy into the sectors that were strong, particularly drugs, and some techs, and hedged my bet with some more financials, and adding stocks that are non-tech or net. and B. (and I think this is huge, at least for me)- i was no longer distracted by the dogs that i had sold. I took them off my monitor and concentrated on what i was interested in buying or trading. I did NOT keep looking at the ones i just sold to see whether or how much i FUKKED up.
This freed up huge energy, and is why I made the comments on ZANY on the other thread. ZANY is not a bad stock, in fact its a great company. But I just don't see it moving in the short run. And that ties up capital, but just as important, ties up energy. And energy and focus are probably our most important asset (ok Ron, preserving capital counts too, ggg) Paul and Sue, i don't mean to pick on ZANY, I have plenty of ZANY like stocks. I have found that when i ditched them, my portfolio performance improved.
As for market outlook, the market has clearly made a statement: Stocks are the place to be. Yes, there will be severe, even violent pull-backs, but Americans, and the world now believes that equities is the place to put your money to make it grow. Baby Boomers, generation X'ers, Y's, Yuppies, Huppies and whatever, have accepted this disciple.
Will this change at some point? Will the market stop going up? Absolutely. At some point. But conditions in the US and world economy will have to change dramatically, and there should be plenty of hints along the way.
Sectors, there is a broadening of the sectors- whereas techs and nets were 1999, Health care looks like it will make up with a vengeance for its underperformance. Energy already had, and likely will do so. Financials look very close to a MAJOR turn. someday, airlines will turn, i hope i own them at that point. But a good chunk of money should go into techs and nets. that is where the action is. Whether trade 'em or hold 'em or both, gotta be there.
Ron, I couldn't agree more with you. Whatever one's style is, if its working, stay with it. If it ain't, gotta figure out why not, and adjust. larry |
