Sunday, December 09, 2007

Down but not Quite Out

Still recovering. I drove 470 miles yesterday on a dog transport. I felt well enough to do it, but today was a different story. I'm sorry for the sparse posting--but fever and achy bones aren't conducive to lucid writing.

A couple of snippets. Both Frank Barbera and Tim Wood were on FSO's Saturday broadcast. Both are looking at a bearish setup, though s-t bullish. It seems to me that their technicals have closely followed the actual market. I do not find them perennially bearish nor bullish. Gary K says that IBD is confirming that we are in a confirmed rally. Colin Twiggs is looking at a 2:1 chance of bear market, and Richard Russell has noted the Dow Theory sell signal. I would note that in my nascent understanding, the market rallied while the Transports were late for the party. So if one waited for the Dow Transport confirmation a good bit of the rally would have been missed.

I wished I could right more. I hope that you stay well.

5 comments:

Anonymous said...

I find it interesting that Louis Navalier stays fully invested. I think a lot of smart money does. On the other hand, Navalier has a "system" (Hulbert verifies the record) that seems to work.

Leisa♠ said...

Some money doesn't have a choice but to be fully invested (mutual funds for example). Knowing this, and that they do not hedge is why I will never just stick my money in a mutual fund again. Outside of mutual funds, I do not think that fully invested means unhedged. So many of us "dumb money holders" are encouraged to stay fully invested but there is precious little that tells us how to hedge. Plus, so much of the money under management is in qualified money (pension/retirement) for which one has few choices in terms of investment vehicles and certainly there is not hedging.

I know that Russell's study on Irrational Optimism has forever changed my view of the "conventional" wisdom of the long term view that by buying and holding one's portfolio can whether any event.

Anonymous said...

leisa:

Hope you feeling better.

golfer from Cara

Anonymous said...

One high total return approach that also helps protect the downside is to buy high-quality, high-yield companies with a history of annual dividend increases. The usual caveats apply, e.g., the company must show a history of consistent, historic (and prospective) earnings growth, low or (better!) no debt, etc., etc.

I learned a lot about this approach from reading Lowell Miller's excellent THE BEST SINGLE INVESTMENT, which I highly recommend. Miller, like Navelier, notes that to reduce volatility, hold really conservative stocks.
Also, a signal that a quality company is out of favor is if its yield is higher than usual. That often represents a buying opportunity. In due time, of course, the higher yield tends to attract buyers to the company and one enjoys an increase in the value of the stock.

Here's more information (from Amazon) on his very wise book:
http://www.amazon.com/Single-Best-Investment-Creating-Dividend/dp/0965175081/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1197384796&sr=1-1

Leisa♠ said...

Golfer...thank you!