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omarbradley
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Advisors for various "off the grid" types.
  • Again...be Very Wary Of This Bull Market 0 comments
    Feb 16, 2014 2:13 PM

    Major blue chips have had a sharp correction to start the year.

    That's says to me the pro's continue to raise cash.

    They're not buying into gold.

    They're not buying into the mining space.

    "Cash is as good as gold" i would argue...and I would be prepared for a sharp and material correction in the days and weeks ahead.

    I think the combination of "Polar Vortex" (surging energy prices) and horrific drought in California (surging food prices) has created an aura of complacency that treasuries have signaling for some time now...through a compression trade (long yields are falling while short dated notes have risen) that "all is not well here."

    The bulk of this site is now overwhelmingly bullish on equities and that is a great contrary indicator in my view.

    I still believe in the recovery...indeed I think the risks of a full fledged massive double recession are still unwarranted. Having said that "the stars are in alignment" for a huge surge in production come Spring (just around the corner) thus causing something that could be a far from a mild fall in prices and tremendous jump in inventories.

    Keep it real folks.

    This equity market is up 30% compounded 5 years running with what all economists agree is the worst post war recovery in history.

    I like a multitude of Dow and "Dow type" stocks...but the Nasdaq and S&P are...simply put...well beyond any hope of a mild correction.

    Stay diversified...i see no reason to panic nor sell short here either. I must think cash "in a no interest rate" environment is THE out of favor play...and thus represents "the play" for the moment.

    If I were to pick one name that looks like a rock star to me it would be Boeing. Ford...on any major sell off...could be a tremendous opportunity as well.

    For those that have followed my advice vis a vis utilities...congratulations...you are now very wealthy and living on the dividends. (WEC at another record high.) I would not only not sell any of the Big Four (WEC, Duke, ETR and Otter Tail) but indeed would be adding to positions here.

    I see interest rates starting to move profoundly lower this year (simply buy the entirety of the yield curve) and the value of these incomes streams...especially if the USA is on the cusp of a generalized price decline....are simply put better than gold itself.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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