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I'm Legging Into Positions: Better "Late" than Never?

Apr. 13, 2009 3:33 PM ETBHP, DBO, DJP, EEM, EWZ, FXI, EWA
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Seeking Alpha Analyst Since 2008

Deflation, debt destruction, money printing, unserviceable debt and impossible unfunded liabilities. One hell of a mess. Keep some cash around, some hard assets, maybe even some stocks. Live within your means. Don't assume your bank will be open tomorrow. Don't assume there will be food on the shelves tomorrow. Don't assume the electricity will work tomorrow. Be prepared. These are precarious times.

I'm usually more adept at standing out of the way of large declines (last two bear markets this decade), than catching bottoms. Being "slow" has kept me out of the market since last June, other than some trading here and there.

The move up from the March low sure seemed like a bear market rally. There are still oodles of lousy or even frighteningly bad data points out there. Not unexpectedly, the market has rallied into earnings as it tends to do from oversold conditions.

But my sense is that this might be, just might be, something more than a bear market rally destined to fail and retest the March lows. I base this on the duration of the bear market (about a year and a half), it's severity, (over 50% decline in the major averages), and, the absolute tidal wave of money the governments of the world are throwing at the problem.

Who would have thought that the US Federal Reserve would be at zero percent interest rates with quantitative easing?

Given these considerations, length of the bear market, its severity, and the massive stimulus being applied to cushion the blow, I am starting to believe that the worst of the stock market declines are behind us. The risk is decreasing, and potential reward increasing.

Did I miss a big move off the bottom? Yes I did, darn it. But I'm legging into the following positions for reasons that are either fairly obvious, and/or have been mentioned in my previous posts:

Disclosure long: BHP, DBO, DJP, EEM, EWZ, FXI, SQM. UYM, EWA. Looking to add on weakness.

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