What's Next? Part Deux
There is a topping process which takes place in major blow offs. While this may not appear as a major blow off with the SPX and NDX barely moving over the last three years, remember that consumer stocks, some financials, homebuilders, some industrials, metals and emerging markets have had a run which is very similar in girth to the run into 2000. I use girth because it has left those markets with massive overinvestment and overvaluations. Remember bubbles tend to come in pairs for psychological reasons.
I'm amazed at how many money managers seem to have little understanding as to what is going on. Sentiment surveys all over the map. Oversold, overbought, overyhyped. Too much short interest. Too much porridge in your bowl and not in mine. Topping is a process. There is a science to it if one is willing to invest time and learn.
I was going to post much of this process but I decided not to as I started typing because it's worth alot more than a blog post. As I said before, I will share alot from an educational perspective but won't be giving away the keys to the castle. Especially since following it would have likely saved alot of professional money managers alot of pain. That may sound overly confident but then I am quite confident in my models and research. Mr. Market may give me a swift kick in the butt for saying that I don't think so. I learned long ago that knowledge and who you know are your only edge in life. So, while I have a little of my own money in the market in this rally, I know the probabilities are extremely high that it is a bogus rally. Not because I feel it but because I model it.
One should strive to learn and become as self sufficient as possible in their investing strategies so I will leave my prior posts this week as a starting point to identifying what happens from a sentiment, economic and market action standpoint. Consider it your homework assignment. Tis better you become self sufficient than rely on me or anyone else for your investing advice. I realize most people don't have the time to do so but the more you learn the less likely you are to buy homebuilders or metals or emerging markets or Apple or Hansen or Caterpillar or Valero or or or after a massive blow off. Or, to listen to someone telling you they are going up forever.
Enjoy the party. The bulls are once again exuding confidence. 50% bullish, 20% bullish, 80% bullish, 30% bullish. Are you riding the roller coaster? Knowledge is the key to getting off.
I'm amazed at how many money managers seem to have little understanding as to what is going on. Sentiment surveys all over the map. Oversold, overbought, overyhyped. Too much short interest. Too much porridge in your bowl and not in mine. Topping is a process. There is a science to it if one is willing to invest time and learn.
I was going to post much of this process but I decided not to as I started typing because it's worth alot more than a blog post. As I said before, I will share alot from an educational perspective but won't be giving away the keys to the castle. Especially since following it would have likely saved alot of professional money managers alot of pain. That may sound overly confident but then I am quite confident in my models and research. Mr. Market may give me a swift kick in the butt for saying that I don't think so. I learned long ago that knowledge and who you know are your only edge in life. So, while I have a little of my own money in the market in this rally, I know the probabilities are extremely high that it is a bogus rally. Not because I feel it but because I model it.
One should strive to learn and become as self sufficient as possible in their investing strategies so I will leave my prior posts this week as a starting point to identifying what happens from a sentiment, economic and market action standpoint. Consider it your homework assignment. Tis better you become self sufficient than rely on me or anyone else for your investing advice. I realize most people don't have the time to do so but the more you learn the less likely you are to buy homebuilders or metals or emerging markets or Apple or Hansen or Caterpillar or Valero or or or after a massive blow off. Or, to listen to someone telling you they are going up forever.
Enjoy the party. The bulls are once again exuding confidence. 50% bullish, 20% bullish, 80% bullish, 30% bullish. Are you riding the roller coaster? Knowledge is the key to getting off.
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