prudentinvestor

Caterpillar, Aluminum Corp. Offer Perspective on Technical vs. Fundamental Investing

Excellent point about the fact that "breaking resistance" on the upside means that it is increasingly likely that most of the gains are behind us.

Like you, I purchased ACH, a little in the low 20's, and more in the mid-low teens, and much, much more under $10. I've unloaded about 10% of it recently at over $30 and plan to keep the rest for a while. Like you, I also got into CAT, mostly in the 20's, but have already unloaded 60% of my position in the mid-high 40's, and will sell more when (if) it breaks through $50.

Unlike you, however, I don't believe that "...Stocks were dirt cheap in October-March based on fundamental factors." I think they were "dirt cheap" compared to the bubblespheric levels of a 15-year era of artificial asset prices that is come and gone. This era cannot be re-created, no matter how egregious the Fed's monetisation program becomes, simply because the requisite, massive rate of price inflation would tear apart the fabric of the economy and society. What the market had priced-in in October-March was the new reality, which some call the "new normal" but I prefer to call it the "old normal". And yes, despite all the cheerleading, we are returning to the old, pre-bubble-era normal economy.