Ganesh Kumar

Mean Reversion: When There Is Blood In the Streets, It's Time To Buy

I do not have problem buying when blood is in streets. That is easy. THe biggest problem I have is when market keeps going up. Assume this. It is easy to get in when Dow is below 10,000. Now after 6 months Dow has moved 1000 points and is now at 10,500. You think it has already come up 1000 points and it will revert to mean. Now it climbs another 1000 to 11,500. Now you say to yourself ha it is up 2000 so it has to revert now. It again climbs another 10000 and is now at 12,500. Now what you do? Do you wait to revert to mean and loose possibly another 1000 point rally or do you get in now only to see it reverting to mean :-). I have this issue across all asset classes. REIT's have gone up significantly, Small Cap has gone up, Commodities have gone up. What do you do in such situations?

'False' Diversification May Prove Costly In 2007

In all asset diversification articles I have only seen "Inflation Hedges". I think all asset allocation models concentrate too much to shield against inflation. Real Estate, Commodities, Equities , TIPS all guard against inflation.
Other than treasury securities is there any other asset class that will guard against "Deflation"?
I think long term US treasury securities are over valued(Untill 10 year yield crosses 5.25%). Is there any other asset class we could consider as a hedge against deflation?