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SSDY - You Know The Acronym

I switched out the last d for year.

It seems like every investor is bearish right now on the market. Of course there are plenty of charys, historical graphs and campfire stories to support either side. And while this probably isn't 2007 all over again, let's not assume just because many are bearish it means there isn't reason to be so. What I'm saying is that like every market rebound and crash isn't the same, neither are the investor mindsets when each of those happen.

Looking at the fundamentals, no one can argue the S&P is not fundamentally overvalued, EM is not struggling to grow and that Europe is having a rough time reaching escape velocity. That's enough news for me to wonder whether this is all baked into today's market prices.

But, if we take a closer look beyond the headlines and blurbs, you'll ironically see a similar, yet not as dire set of details on the markets' health to date.

In the near term, I'd like to think much of the worry is more about the overall financial infrastructure of global markets holding up versus the top line valuations of many companies that live in the stock market world.

Structurally, central banKS have been and will continue to be very accomodative to the markets. Yes the fed raised rates, but 25 bps is hardly much of a raise.

The EU continues to struggle with strong growth because, well, they're europeans, but PMI in some of the bigger economies has been improving steadily amd slowly the past year. By no means does this mean they're rebounding, but it could mean we're hitting a trough there.

What I've told most of my blog readers is this - it's nit Armageddon, its the market taking a breather. After a fed induced 6 year market rising binge, it's time for the US markets to catch their breath and see if the rest of the world can catch up.

Officially, I'm in mostly cash right now. I know, I know, I'm crazy. But I'm convinced that short term it's the better alternative to what other options I've seen out there. Of course, my position may be different because I closed out most of my investments beginning of last year and dabbled more end of last year than created very long term positions. This means if I were to buy back in now, I'd be certifiably nuts to take bog, long positions.

My strategy has been to let the market reset, work through some of its daddy issues with the fed and once more clarity is seem, put money to work again.

Remember, there's a reason for this volitility and it's not because of retail investors. Suffice to say, moves like the ones we've seen can most likely be attributed to big money/fund managers repositioning portfolios for clients into the new year. And while lots of money may be sitting on the sideline, you can bet any redeployment of that cash will be just as hard as it was for them to pull it out of the market. That likekly coukd mean a gradual step back from the marlet's for US investors until better valuations arise. Or, we could see that money move into bonds or europe or alternative investments.

Stay thirsty my friends!


I'm far from a prof investor, so do your own homework, make up your own mind on how to invest. Everyone has different needs, expectations and goals. Only you can determine your best path for growth.

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