In April, I reviewed an excellent book: “Contrarian Investing” by Anthony Gallea. (Link to my review is here if the tech geniuses at DL.com put it up, otherwise page back a couple of pages on the blog roll)
I have been concerned about the massive investor inflows into bonds and out of stocks for a few months now. This issue is even starting to make headlines on the New York Times and other major non-financial newspapers.
This S&P 500 chart looks horrible - or it looks great - depends how you read it. I have attached my note on it today. See the attached file below.
Readers of my blog know that I love reading to improve my investing skills. I am posting a review of one of the best books I've ever read called "The Rational Optimist." Despite my surly nature, I've been accused of being a permanent optimist. My naive, childlike optimism that technology will solve almost all human problems sounds almost religious to those that believe in the more traditional mysticism called organized religion. So here it is, a book by a kindred soul, who like me, believes life will be better, not worse, for my future grandchildren.
Most people that discuss their stock trading on Twitter and the internet are extremely short-term traders, "day-traders" in fact, although that term has fallen out of favor since the first wave of them got slaughtered in 2001. I can count on one hand the number of short-term traders that consistently make money and have records to show for it. (Anthony Davian is one of them)
I find it amusing how everyone in Hedgistan clings to every stupid forecast by so-called researchers as if they were words from the Buddha. It's silly, really. Every tech analyst has memorized Gartner, iSuppli, or IDC's latest forecasts and can spout them out faster than a blue-hair lady watching Jeopardy.
If you follow my scribblings at all, (or are intrepid enough to invest alongside me) you know that I've gotten my ass handed to me this month. I started the month up 24% for the year, lost half of those gains, regained them a week later, and re-lost them. I'm back to +12% again, but what a disaster this month has been.
I'm still not selling! Here's why.
I've been a lonely, unapologetic bull for a while now. So I tried to think of every reason to sell US stocks - I made the list below.
I strongly believe serious investors should be learning new things their entire adult lives. If you think school ends after college or maybe an MBA, you will find yourself pitifully behind the curve someday. I just read "The Big Short" this weekend - it popped up as a kindle version for $9.99, and now I see that it is unavailable, so I'm not sure what is going on at Amazon. What I do know is the book is terrific, and should be read by everyone that invests money.
Germany joins the “you can’t short” gang – this ended disastrously for the US markets, and contributed to downward volatility, and did not protect banks from needing to tap the taxpayers for hundreds of billions of dollars of bailout bounty. Merkel wants to tax financial markets, and take ratings companies under European supervision so governments regain “primacy” over markets. Good luck with that.
Bears were talking their book all weekend. Euro fell some more, Chinese stocks fell another 5%, yet still looks like US stocks will open flat or positive. In a “competitive devaluation” game, I like the country with the biggest military force. The US. Low-grade corporate bonds are probably the riskiest asset class right now. US economy is growing 3.7% per quarter, 2 ½ times faster than median forecast of economists surveyed in June 2009. Winners?
Note to self, here are some lessons from the recent stock market sell-off:
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