A Weak Day to Begin the Week
The broad market portfolio was only up 10 basis points today, against greater moves for the major averages. Leading the charge on the downside was Fresh Del Monte. Nothing was materially up, aside from Griupo Casa Saba.
There’s a lot of “I told you so” going on in the pundit-sphere at present regarding subprime mortgages. Those that have read me at RealMoney know that I have been talking about the problems there for the past 2-3 years. I will say this, the shrillness of the Johnny-come-latelys on the issue almost make me want to reconsider my opinion.
I’ll have the results of my comparison of competitors to my portfolio available tomorrow. I’m still scrubbing the data.Full disclosure: Long FDP SAB
March 13th, 20072:38 pm at
Today is the second tremor and with every technician this side of planet Mars expecting a test of the recent low, a new low could bring with it the actual earthquake. I know that you have been cautious but I am wondering why you would believe that a brief relaxation in signs of risk would suggest that the risk has passed? Isn’t it quite normal for things to calm down during brief periods during corrections and/or bear markets?
March 13th, 20073:36 pm at
I guess what I am saying is this: the current causes trotted out for us to rollover into a bear market seem inadequate to me. Those causes are adequate to lead to troubles in some of the dodgier financials, and housing related names.
For there to be a broader selloff that sticks, we need something bigger — a self-reinforcing appreciation of the yen, a diminution of global trade and capital flows, a new war, etc. These things can happen, and I have told people to be on the lookout. But those are not certain to occur. I try to avoid certainty on market issues. As for me, I stay on the conservative side of my asset policies, and lose a little less than the market in downdrafts. Lord helping me, I’ll make it up on the other side. After 2002 comes 2003, perhaps.March 13th, 20074:24 pm at
Thanks for the clarification - and for the “record” I don’t believe this is the start of a recessionary bear market. However, as I stated in a prior post, I do/did believe that the current correction is likely to surprise people as to its magnitude. I don’t have any empirical gauges to back it up yet, but my guess at this point is that a recessionary bear market is more likely to be a 2008 issue. In the mean time though, protecting during a nasty correction sure does make it easier to scoop up fallen angels!
March 13th, 20074:34 pm at
I appreciate your feedback, and I did not mean to place any words in your mouth. There is a large-ish doom and gloom crowd that grabs at every large twitch in the market. I like my bears to be more well-studied, like James Grant.
March 13th, 20077:23 pm at
I agree with your point regarding some bears. However, I stopped getting Grant’s because it was long on bearish talk but very short on timing mechanisms. Pinpointing an overvalued market isn’t all that hard….it is figuring out the “when” that is the hardest part and although Grant’s is a great read I couldn’t justify the relatively steep price….especially since I don’t trade CDS’s!
September 7th, 20079:17 pm at
Hi all!
Very good site! I like it! Thanks!
G’night