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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: UncleBigs who wrote (63160)	6/8/2006 10:41:50 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

low energy spx weighting has as much to do with overvalued tech and financials. well, obviously if energy is low then something else must be high. and therefore overvalued. but it also means the market doesn't care as much about energy as other sectors. hence market is bearish on energy and has been throughout the bull market. low [you obviously mean high] mpg vehicles you know, it takes a LONG time for higher mpg vehicles to have an impact on overall fleet mpg, and longer still on aggregate gasoline demand. when you sell your SUV to buy a Prius, somebody else buys your SUV and drives it for a few years. beside, carmakers will drag out the low mpg thing as long as possible. it takes a long time to retool factories and is expensive. thus it is cheaper for the domestic car makers to offer gas rebates than to retool factories. they are doing this. the mfr is eating the cost instead of the consumer, but the same gas is consumed. it will take MANY YEARS to significantly lower avg fleet mpg, and in the meantime the fleet (and miles driven) continues to grow in number, the further pressuring aggregate miles driven and gasoline demand. all the sprawl of the past few years, which cannot be serviced by public transport, is another structural factor pointing to higher demand. a mild hurricane season, an iranian settlement only amateurs trade stocks on that type of short-term crap. like the folks on the Weather Channel thread that all faked themselves out of the great January rally because their thermometer readings weren't right. downside over the shorter term can be severe. it's best to have plenty of dry powder for a big pullback. well, big pullback is what we JUST HAD. i actually called on of these in advance at the end of Jan. i agree w/you heartily regarding dry powder. i typically have 50% cash myself, though i am living on the wild side right and down to 48% cash to buy into today's chunderfest. any number of things could throw a spanner in the works of the energy bull--bird flu, asteroids blowing up Washington, that cliff or whatever falling off in Africa and submerging the Eastern Seaboard in oceanwater, etc. but it WON'T be high mpg cars or the Iranians playing nice or warm weather--those bogus things only take out Weather Channel amateurs, who would be taken out anyway because after all, somebody's gotta deliver pizzas and clean the pools of the world.