June 05, 2006
Market Stinks - Time to step back, read, think and plan.
All trends end and when they do, profits disappear and slowly your portfolio turns to cash. It is a process.
Most of my stock portfolio and hedge fund alloocations follow trend disciplines. One difference is that I do not, nor does my equity trend allocation (Blackstar) short stocks. When we are out, we are out. Unless stocks start taking out all-time highs en masse, we are idle watchers.
My managed futures trend allocations are always invested in various markets long and short depending on their trend signals.
Today, my stock list dwindled yet again and the watch list shrunk as well. In my world, life gets easier. I don't get emotional, I build watchlists and do other things that need catching up.
Poor Cramer and the rest of the hedge fund managers feel they must come up with daily ways to make money. Fidelity, Schwab, Goldman and Merrill are happy to serve this group. Few people come out ahead during corrections and bear markets. It is a hamster on a wheel and as U2 says "Running to Stand Still" for a huge percentage of traders and investors.
I expect prices to drift lower for a while, but am indifferent.
With serious price dislocations and declines, I will dabble in the market with some discretionary money and also look to build positions in my favorite companies. Other than that, it looks quiet for good stock action to the upside in the months ahead.
I can't say much would excite me here.
My wish list for lower prices include:
Garmin and other GPS stocks
Other commodity stocks
Fedex and other leading logistic companies
Ebay, Google, Yahoo
All the while, I will check in with Investor's Daily and my market blogroll. The new high-list will start to show new leaders as well over the next few weeks.
If you must transact, STAY AWAY FROM THE NEW LOW LIST. Such long time cellar dwellers as Revlon and Gateway will continue to show themselves on a daily basis.
If you have big debt and little equity as a corporation or individual, I suspect this next phase will put you out of your misery!