I see so many overextended stocks; I can't shake a stick at them all. If I had bigger position sizes I'd be pruning left, right, and upside down. Since my position sizes are relatively small the danger when I prune is my portfolio turns from net long to net neutral or indeed short. That said, I am tossing some of these positions that have run, run, and run with no rest - cutting about 1/3rd to 1/2th and looking to buy back when they fall to any support area. On the positive side, these are now buy on dip charts. Here are two such examples
I think even the most gorged bulls would concede it would be healthy to pullback some, and consolidate before making their next run. So many stocks have little near term support now because the charts have become so extended.
Long Mosaic, Allegiant Travel in fund; no personal position
2 comments:
Another dilemma for fund managers, as if market risk and systemic risk isn't enough. You are forced to buy stock to feed our insatiable need for greed. LOL.
Uncharted ground with facts supporting doom and gloom and now after a major run forward even crummy sectors like home builders, REIT's, and entertainment are overbought on every level.
Will there be a big pullback prior to major corporate earnings release?
And just how does a fund manager deal with chucking stocks when a market reverses? Friday's job numbers as you said will be huge and I expect to obtain shorts just above that 850-870 level, if we make it. LOL.
Keith, I manage more for absolute return. If you have been beating the mkt for the year and did not take those huge losses in Jan and Feb you feel a lot less "performance anxiety"
That said the vast majority are fully invested longs so they will feel that and you have to be aware of their moves due to it. i.e. act like lemmings.
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