I wrote last month that this market was fun and exciting. I think I have changed my mind. It is no longer fun and like the “ass-whoopin’” Florida put on LSU this year, I just want to change the channel. Last week I celebrated my 33rd birthday and I hope that on all future birthdays that the economic mood of the country feels better than this. What’s wrong with this market?
I have strong feelings about all the craziness that I can easily outline.
- Baby-boomers are getting closer to retirement. That generation has amassed so much wealth in their more recent lifetime that they are not going to let it get away. They also have fading memories from their parent’s stories from the hardship of the 30s (I’m not going to say the word to describe that time period).
- Government is involved entirely too much in this process. I understand being there to ensure the credit markets flow, but this TARP plan has created a mad-house. No longer is the Treasury going to buy subprime mortgages to help the banks free-up cash flow. Instead, they are going to provide capital to the banks.
- Is everyone that lends money going to become a bank holding company? I loaned money to my buddy Nick last year. Can I become a bank holding company? I can see this shaking out in ten years when there is a wave of bank holding companies no longer wanting to be bank holding companies because they can’t make very much money.
- The era of no-failures. As a country, we can’t take any deaths on the battlefield. Yes, that’s right. Even war has been “babied” to that point. Now, any industry that can’t make it is begging for money from the government. The car industry is up to bat now and they are making dire warnings about all the job losses and that their industry poses systemic risk to the economy. This is all so sad. We are actually buying into this mess and will probably bail them out somehow.
The market is starved for capitalism. Where are the IPOs? Where’s the innovation? No growth. Government spreading money around like bad parents. Think about it? Why would anyone invest right now? It hardly seems worth it. People invest in the market because they think the company they are buying has an advantage over their competitors. Does anyone know of one company that has that advantage right now? You may think you know, then next week you would be wrong. I realize the government is in a precarious position. They look to that period in the 30s and see all the things that were done wrong. Hoover is back and no I don’t mean the vacuum cleaner. Government seems so worried about avoiding a repeat of that time that we will probably end up repeating that time because they overshot to the other side.
I repeat…this is painful to watch.
Trading Portfolio
No changes have been made. October 10, 2008 was the last buy where I put 1/3 of the portfolio to work. I still have 1/3 in SPY and the rest sitting in cash. I plan to buy more soon as my trading software program creates opportunities. The key is patience. From the buy on October 10, 2008, my position in SPY is down 8%. The overall portfolio is down 2.5%.
IRA
Sitting in 100% cash still.
Market Data Software
This program has been a life saver. It takes the emotions out of things. Just when I look at the market and I think, “Here’s an intermediate bottom,” I pull up the software and it shows nothing…or a sector bottom or two. Even though things have been bad since the last online update, nothing real good has setup like back in October. We have been working lower and lower over a period of weeks. However, recently the Nasdaq and the Russell 2000 have been bottoming. Sometimes on the same day, sometimes on different days. I don’t like either one of those indexes right now. Oil has been bottoming day after day after day and my indicator is pretty unreliable with all the pressure on that sector right now. I will probably get more cash into the market when all 4 major indices (Dow, S&P 500, Nasdaq, and Russell 2000) all hit a “Big Bottom” on my program on the same day along with a majority of the sectors.
Here’s a snapshot of my Market Data software program as of yesterday.
Filed under: The Market
