tirsdag den 4. november 2008

Does it matter ?

Back from small holiday - must admit a long life in trading taught one clear thing: When you have the good fortune to have had a good spell, it is time to go away as the biggest losses tends to come right after the biggest gains - in that spirit I took Friday and most of Monday off - now however I am back in the chair looking for clues in what to me is a more complicated story:

Are we to see major bear-market rally? Even in 1929-34 period we saw 50% rally from lows without putting the low in place.

What scares me is how we all line up to micro-manage what is clearly a serious bear-market, potentially the biggest in the last 300 years! Barrons tells its best:

NOW THAT STOCKS HAVE tumbled to five-year lows, 62% of Big Money respondents say they're undervalued, up from 55% last spring. A scant 7% think equities are overvalued at today's levels. Almost 70% say stocks will be the best-performing asset class in 2009, compared with 13% who favor cash, and 11% who prefer bonds.

70% expect stock to be best performing asset - clearly the 3% dividend yield is part of that, but I must say the only way stocks become best asset would be serious unwinding of the low interest rates... which I find likely, and more to the point a serious increase in the steepness of the 2-10 curve is what we are betting on for 2009, when Governments will have to pay for all the public spending they have initiated.

Or in different words: Stocks performs as other alternatives performs worse - this is not to be belittled - when you are paid to invest, keeping cash @ 95% as we are now is now a winning formula!

We are having our Weekly Investmeeting today and I am looking forward to the above disscussion.

In this short blog also two links:

Carl Rove's map sees clearly Obama victory - but will Democrats gain 60 mandates and totally control politics?


Jim Rogers is always worth your time ;-)



95% cash - trying to figure out where to go from here...

Safe trading,


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