Taking Action Ahead of Time

The jobs number stunk but fortunately the revisions stunk too. Jack Bouroudjian didn't seem too worried though, so chances are all is honky dory (that is a sarcastic comment).

Things appear to playing out as they always do, which is a positive the way I view the world. Declines in new jobs, fewer hours worked, people leaving the work force and so on, are all ordinary recessionary stats.

The one really negative for me - but, readers, correct me if I am wrong - is based on what I see on the TV and read in mainstream media, and that is that there are very few people that take action ahead of time or, more correctly, have some sort of plan of how and when to take defensive action.

Things being what they are, I do get interviewed every so often, and I don't know what I could possibly come up with if asked 'What should investors do now? Is it too late?' That is a no win question.

If it is a no win question, then it must also be a no win strategy.

Is now the time to own commodities? Should people buy gold? Should you sell financials? Should you buy healthcare? On and on.

The focus of this blog has been taking action ahead of time. If you have a diversified portfolio you already have a little gold and a little commodity exposure. These have been great holds for a long time. The question then becomes: Should I sell a little more or add a little more? That is an infinitely easier question to try to tackle.

If you've been lucky enough to be underweight financials through all of this, then adding a little or taking a little off becomes less scary.

And so on.

Things written about here and in other places are proactive decisions, and while not everything has been correct, of course, the decline has been less. All of the things I have written about and implemented for clients I lifted from other people, meaning it was all out there before I came along.

The bigger macro is how do you avoid big chunks of down a lot? You worry about it before it happens. I believe Mr. Kudlow could learn a thing or three about this concept.

Comments

[richandmer]

You always sound like you do no wrong. Always ahead of the game and always making it sound like you are better than the rest of us. I would hate for you to be my advisor. Regardless of how well I might have done, you would have always done better, been more prepared, thought further ahead than me.

[gordon]

correct me, but thought I saw you last week on CNBC and you were right on the money w/ defensive stance/ideas... basically, protect return OF capital.
Read Peter Schiff's assessment of CNBC and their propaganda campaign of denial of his predictions over the last 5 yrs. www.financialsense.com...

[Leser]

I find your comments a good lesson to take to heart from the present problems: diversify. When I haven't done it in the past, I've paid the price. We all have learning curves. Thanks for your good reminder. You'd be a great advisor to have! By the way the second principal part is "stank", not "stunk". "Stunk" is used with "have, has," etc. "Stank" is used alone, which is what those numbers did! Good article. Thanks.

[RogerNusbaum]

Mossy, you do not read enough of my content as I have disclosed countless times being a year early about the bear market and how i mitigated the consequence of being wrong. Further I have looked at moves made for clients that were right, wrong or both.

That said, between blogging and what i have written at TSCM/RealMoney has worked out pretty well and i believe the posts i have written give me the credibility for the above comments. This has been a good cycle for me the next one may not be--i am well aware of this.

Gordon, thanks for the kind word--I was on Friday afternoon really just saying the same thing I have been saying for a couple of years in print (Mossy you can email me if you would like links). it would have been more helpful to viewers if they had me on 12 months ago, oh well.

reader3, stank? really? not joking, didn't know that was a word.

[Leser]

Roger, yes, in school they made us memorize the three principal parts, like "drink/drank/drun... And so it goes with "stink/stank/stun... So, "My returns on that investment stank." But, "They would have stunk even worse, if I hadn't diversified." Sorry about the English lesson, but I let others correct me and figure it's for the good of all to be making use of standard speech. Glad you aren't offended.

[StateofConfusion]

The real problem is the constant changing of opinions in the media. Cramer says to buy this or that. Google is great, even at $600. Buy gold, buy silver, buy Brazil stocks. How can anyone be defensive with all the advice. Then everything drops at once because of the herd mentality. Is the market going to bottom or will it go down further? What are the banks hiding now? Is it time to get in or out?
Basically, you can not be defensive because almost all stocks just go down at once (quickly) and what can you believe?
I just do my own thing and wait it out.