Tuesday, October 14, 2008

Readers Help

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#1 - I am back to about 50% cash after taking a bevy of profits into this morning from Friday's buys - tough to go long this market, or go short it until fundamentals are respected. Everything is a sentiment trade...

#2 - I am not talking that much about individual stocks or new ideas because frankly, repeat point #1. Fundamentals have not meant anything in a long while - many many many stocks whose fundamentals I like are being treated no different than companies with faltering fundamentals. No differentiation means no reason to give our money to the market in big doses except for short periods of time. Until conditions improve I'm going to have very high cash exposure - and only over allocate capital either long or short at market extremes (i.e. last week) Until we get 2-3 weeks straight where the market doesn't change direction 4% every other day, and individual stocks can put together rallies that last more than 48 hours, this has just turned into a big casino where we have no advantage. For weeks upon weeks upon months its been student body left (up) or student body right (down). Not investing. I'm willing to pass up some gains in return for this safety as we just made 22% in 3 days and I'm happy to sit on that. I'm still hoping for more of a melt up in the weeks to come so we can get more short for December hedge fund redemptions.

#3 - I am starved for good charts - I am curious on your watch lists and holdings if you technical types out there can find stocks over both their 50 and 200 day moving averages. It is amazing how few there are.

If you know of any that we do not hold, market capitalization is over $250 million, and is profitable and growing - without a lot of debt, please add a comment to this blog entry with symbol. A few days ago we had a record of most NYSE companies below their 200 day moving average, so in my "relative strength" world any stock who has rebounded to get back over both the 50 and 200 day is "telling us" something - i.e. buy me. The problem is I can't find many on my watch lists. If you see any, drop a line.

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Fun statistic of the day

TrimTabs is reporting equity mutual fund investors redeemed $8.8 billion on Friday. Bond funds had a record $10.2 b one-day outflow on Friday as well. Equity fund outflows for the month of October are now estimated at $55.8 b, which would be the largest outflow since ICI began records in 1984.

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