Timing is Everything, Time to Go Cash
Use this slow Friday to re-think your portfolio, its a great time to clean house and go 100% cash. The market is at a turning point and now is the time to make sure you are ready for the next leg. Besides, with all that cash on hand, you can stuff it into your rims and really bling it all out.
Let's review the two best articles I read this week (Doug Kass & the Fly) and examine your options for the rest of 2009. Not to mention a few stock picks for the weeks ahead (WMT, VLO, AKS).
Take two voices of reason, both brilliant, opinionated but have been spot on with the events and patterns of 2009.
Doug Kass - Kass Watch: "The Market has Likely Topped"
The article done by Doug Kass at TheStreet.com was the best thing I've read all week, if there's one thing to review this weekend, its this 4-page article at theStreet.com -- to read Doug Kass' Full article - Click Here
Kass said - "Just as I looked over the valley in March 2009 toward the positive effects of massive monetary/fiscal stimulation within the framework of a downside overshoot in valuations and remarkably negative sentiment, I now suggest another contrarian view is appropriate as I look over the visible green shoots of recovery toward a hostile assault of nonconventional factors that few business/credit cycles and even fewer investors have ever witnessed"
The Fly - Words of Wisdom from the Fly (iBankCoin.com)
Instead, the market is going to squeeze itself higher, for the duration of 2009. If you are in the business of trading stocks, 2009 should be the year that you clean house. This is the banner year that you will brag to your Grankids about.
With that in mind, stop shorting stocks, you f'ing morons.
Oh no, the market is shitting the bed again. What-am-I-going-to-do?
Soon enough, the bearshitters will be out in force, racing up and down Wall in their FAZmobiles. As for me, I am full of regrets this morning. I regret selling Aruba Networks, Inc. (ARUN: 9.4299 +15.85%) , OmniVision Technologies, Inc. (OVTI: 14.97 +12.56%) , Advanced Micro Devices, Inc. (AMD: 4.37 +3.31%) and TriQuint Semiconductor (TQNT: 7.45 +2.90%) too soon. If only, and I mean this sincerely, the market pulled back 10%, I would be able to buy some good companies—at a discount. However, something tells me, that will not occur.
Then there's Jim Cramer weighing in on Kass's Top Call:
There is nothing in Doug's thinking that makes me feel there will be more than that, because every time we go down 3%-5%, we get the fear, we get the panic, we get the wall of worry that makes me want to get back in big. In other words, the worries that Doug articulates are hellacious, but much of it is in the market and has been in the market for about 1,000 Dow points now. In the meantime, the earnings are getting better, the inventories are lean, housing is improving, so are autos. If we get employment back, we are going higher.
I don't want drama, I don't want to go against the big guy -- not worth it for 400 points. I am simply saying I get it, there are problems, problems that will create short, sharp, shallow dips every time they hit the consciousness of the public.
And I'll buy the market on them, because the fear and belief of doom will be so palpable, because the naysayers will be out in such full force, that you have to take the other side of the trade, even Doug's trade.
WHAT TO MAKE OF IT ALL
Fellow Masters, at a time like this I feel its best to be 100% cash. It doesn't hurt. Not all of us can do that, you may be involved covered calls or have leveraged your portfolio in a number of ways but if you can -- sell it all. Rather than be kicked in the gut by any large swings in the market, just sit on the sidelines.
We have hit a pivotal point in 2009, we had the March Madness Rally, and all the peaks in valleys in between that time. Volume has been light lately on the major exchanges, use this as a time to go fishing and get your head back in the game.
I believe we are headed for a slight correction, but that correction will be short lived. Thus, I'm a Kass until Sept but come Oct, I'm thinking the Fly is on the money.
Put a shopping list together of your favorite stocks, there are some bargains out there right now. The Masters like Wal-Mart (NYSE:WMT), AK Steel (NYSE:AKS) and Valero (NYSE:VLO) for the moment. I'm not ready to buy any of these stocks but I'm watching them, they show the greatest prospect when the U.S. and World economies begin to really improve. VLO will most likely go lower, I would like to buy at a new 52-week low, that may happen, it may not.
Again, being cash at a time like this and taking everything in is the right play for me. Happy safe investing.
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