Was going to post to the old "anyone buying?" thread, then changed my mind, as my question is really the opposite. I've been coasting thru the rally the last few several months like a good troop, hands off. The Europe business has been in the back of my mind for months, but the markets seem to look for the sunny side of everything. Any glimmer of hope for Greece extends the rally. Somehow, it seems over optimistic for me. The US may be doing better, but I think a sell off in Europe will nail us, too. I've maintained what I consider is a good allocation for me in stocks/equity funds. With the run-up, I'm probably on the high side of that allocation now, and contemplating getting back into that comfort zone. Seems like the WSJ, etc are cautious, but willing to ride a little further, mostly due to a lack of other options. Closing in on 13,000 on the Dow. What happens in the summer?
I think Cramer gave a great answer to that in the first 8 minutes of today's Mad Money. http://video.cnbc.com/gallery/?video=3000073860
I never watch him because I can't take his beating around the bush, machine-gun blathering. I don't doubt that he has more knowledge than me though. I skipped ahead to about the 7 minute mark, and gathered he does not feel selling is a good idea. I'm not contemplating any wholesale sell off, just a re-positioning back to a comfort level. I had gotten more aggressive around summer of 2009, but don't have that upside confidence as much now. I guess if it is something that weighs on my mind enough to type it out on here, I've already made a decision about what is right for me.
Ask yourself what usually happens in Presidential election years, the market goes up, I think it will head marginally up until peaking in the summer, but no great fall until the after the election. Obama will win and the tax rate on capital gains will go up to 25% next year. Having said that, I'm waiting until July before I start short selling.
I'm with you brother. I like what Cramer has to say, I just can't listen to him through his "infotainment" shtick long enough to hear it. I would not give specific advice on the internet, but I can tell you that there is much talk about the future of the oil market. The issue is coming to a head, and when it does, there will be fallout. In other words, there will be significant ancillary effects felt when the oil market moves...and it will. I love it when clients are talking about selling when the markets are rising. It's a very rare thing. The old saying 'buy low, sell high' sounds great, but rarely is it put into practice. I sold a fair amount of holdings Friday. There are some positions I will ride for a while before pulling the trigger.
The only issue I see is that once the market begins to fall, everybody and their dog will be shorting. Some times, there is significant gains to be had by shorting early. And, I agree that the market is always sensitive to elections. The biggest problem facing Obama right now is the Iran issue, and there is a lot at stake (oil) that investors are watching. It'll be a very, very interesting 4th quarter.
Cramer's point of Friday's show was that there is always some crisis in the news that can lead to a sell off - whether it's an event in Europe, the Middle East, Japan, or right here in the Americas. And the scrutiny of the today's media exaggerates the crisis making the sell-off worse. The fundamentals of some companies may potentially be affected, but not all. So the sell-off may include companies whose bottom line is unrelated to the crisis at hand. His Bristol Myers Theory asks, following each "crisis of the week," What does that have to do with the price of Bristol Myers?" If the price of a fundamentally sound Bristol Myers falls in a broad sell-off, but there's no reason to think the crisis has an impact on Bristol Myers' fundamentals, then it's a buying opportunity. He also gave the example of turmoil in Eygpt leading to a broad market sell-off that including oil stocks. Turmoil in Eygpt ordinarily leads to an increase in oil prices, helping the oil stocks. Cramer said those who recognized that and bought on the dip made a nice profit. Personally, I'm not a market timer. Too hard for me to figure out when to get back in and, also, I fear missing a big bull run. So I stay fully invested. I let the mutual fund managers figure out which companies are the Bristol Myers and which are not.
Obviously the wise and true philosophy is to NOT be a market timer. I feel guilty even admitting I am, to a degree. My excuse is that I reduced my market exposure some before the big crash after reading an article by James B. Stewart when he was still with the WSJ. Not enough to escape unharmed, but it was some consolation. Stewart had basically written that market timing was seldom advisable, but at the time things were just nuts. For the past couple of years I've allowed my exposure to increase a little more than I'm comfortable with, because of the total lack of other avenues for any kind of yield. Bonds have been great, but they could reverse their course, too, if interest rate rise. Very hard to find anything "safe" that will outpace inflation. One of the things I've always thought was funny is how investor sentiment runs at odds with what happens in the market. It makes sense- if the market rises, you feel bullish, if it falls, you feel bearish. This graph is a little funny, you have to look closely, but you can see how the best buying opportunities are often when people feel most bearish. Right now bullish sentiment is very high. The chart is from this site: http://macrostory.com/contact-us/investor-sentiment/
Picking a number publicly seems like a jinx. I don't have the nerve. Now that we are this high, I'll admit that at one time I had thought that when the Dow hit 12,000 that would be about it. Not a great guess.
If you are bearish you have pulled money out of the market and there is a lot of cash on the sidelines looking for a place to go... If you are bullish you probably have most of your money in the market and that leaves less on the sidelines for market support.... I am a huge contrarian...
While I've stated that I think a down turn is coming later this summer, I'm not bullish enough not to have put stop loss orders in on my protfolio at approximately 10% to 15% below their current market price depending on the stock and I'm moving to the sidelines with Apple later this week. But I will move the Apple gains to energy stocks with smaller (5%) stop losses.
It's good to see people placing stop loss orders on their investments. Most people don't understand them enough, and don't even want to mess with them. I tell all of my active stock trading clients that they serve a beneficial purpose at times. So, kudos to you. Funny you should mention Apple. I sold a very significant portion of my Apple holding last Friday. I don't spend as much time as I should on my own accounts, so I had gotten out of whack with my allocation. Apple has been very good to me, and I figured it was time to trim that position (for many reasons). I'll probably move the gains into something very short term for now. By the time I get back to my own accounts, I have no idea what the market will look like.
Like I said above, Cramer does have good insight, I just can't watch him. I agree with his statement on "the crisis of the week", but the current international environment makes the next few weeks very interesting. In other words, it's not just a media driven, attract more viewers kind of environment. The Iran issue is a major one, and there is going to be a resolution (one way or another) at some point in the next year. There is no question that once an event occurs (whether good or bad for the US), the region as a whole will react, and the oil markets will too. I'm usually pretty even-keel when I talk about my market outlook with clients, however, I'm seeing some rough waters ahead. Now, if I could see the future, well...I wouldn't be posting on here, I'd be too busy sitting in the sun at my private island in the Bahamas. As for you not being a market timer, that's a great strategy if you're not actively watching your portfolio. The majority of average investors out there should follow your advice. mutual funds are a good place to keep your money until you reach a point that you can hire a private money manager (most managers will accept $100k minimum, but keep in mind that each manager has a specialty, small cap/mid cap/international/etc. So, if you're looking to invest a million or more, then that's the way to go. Like having a private mutual fund). Anyway, I digress. Sounds like you are doing well.
I quit watching Cramer after Jon Stewart made him cry. How's he doing these days? Is he making better calls? Stewart really had him backed in a corner for giving out bad advice. I thought maybe his career was over then.
I've got stops on all my stocks, but have a bigger percentage in mutual funds. Mostly in tax deferred accounts, but it's a stickier matter to plan ahead with them. It suits me, though. I don't have the experience to make a lot of decisions about when to buy and sell.
You could sell your stocks and buy gold. Gold's 11 year run is probably not over. Here is Dow as priced in gold. http://home.earthlink.net/~intelligentbear/com-dow-au.htm
Nowhere to go but down. I was just thinking about this thread yesterday. I still think a sell-off is coming, but for no intelligent reason. The warm weather makes it seem like May, so I'm expecting it any day. Wish there were someplace you could earn a little interest while waiting.
