Keep Going Back to Agriculture and Infrastructure

A market won't wash out to the downside until the leaders get hit. We have a decent little run today down but until I see the large cap tech, agriculture and infrastructure names fall - you don't have any sort of real correction.

If you are in these sectors which I have been talking about as my overweights for 2008 you don't even realize the market is down today. Wanna see?

Agriculture
POT +0.0%
MOS -0.5%
CF -2.2%
CNH +0.1%
AG +4.6%
TNH +0.8%
MON -1.6%
BG -8.2% (only because they announced a stock offering today)
AGU -3.4% (only due to earnings, buy the rumor, sell the news)

Infrastructure
KBR -7.8% (only due to earnings)
JEC -2.8%
PCR -1.7%
SGR -1.5%
MDR -1.0%
FWLT -0.6%
CBI +6.0% (remember I wanted to buy this on a pullback after yesterday's stellar earnings; not so much!)

Baidu, Google, Apple, Research in Motion - blah blah - they never fall. Too much performance chasing by institutions who need to find returns one way or the other or risk looking bad.

So take out the guys above who have specific catalysts (earnings, offerings) driving them down, and the rest of the group is quite solid for a market hurting so bad. The ironic thing is these are the stocks I want to buy more of! But at lower prices. So it appears we need a lot more of a wash out before these stocks really begin to fall the 5-10% some of their brothers in other sectors are feeling today. So I am buying the ones like KBR that offer opportunities, and leaving dry powder in hopes the others weaken so I can add more. So far, it hasn't happened. These are now the leaderships groups - when the market goes up these will go up effectively, and then the market goes down, these hold up relatively well (except for the times we get washed out panicked selling). So when you look at a market from a 'sector' viewpoint, this is the type of strength you want to see (unless you are like me and wanting to add exposure to these areas). :) So until we reach 'fear' factor stage, it appears these will not be falling too severely. The numbers, backlogs, and fundamentals are just too strong. And in about mid 2009 you will start to see these names touted on the covers of Kiplinger's and Money Magazine as the "next hot sectors" - just when you should be selling... ;)

Long a whole bunch of everything above...