Friday, February 05, 2010

Daily Sector Sort

Daily Change Change from Broad Market
Personal & Household Goods -2.38% 0.79%
Telecommunications -2.45% 0.72%
Retail -2.49% 0.68%
Food & Beverage -2.51% 0.66%
Utilities -2.57% 0.60%
Consumer Goods -2.60% 0.57%
Health Care -2.71% 0.46%
Insurance -2.73% 0.44%
Consumer Services -2.84% 0.33%
Technology -2.96% 0.21%
Media -3.05% 0.12%
Industrial Goods & Services -3.08% 0.09%
Industrials -3.12% 0.05%
Total Stock Market Index -3.17% 0.00%
Chemicals -3.27% -0.10%
Travel & Leisure -3.59% -0.42%
Construction & Materials -3.69% -0.52%
Financials -3.75% -0.58%
Oil & Gas -4.01% -0.84%
Financial Services -4.08% -0.91%
Banks -4.17% -1.00%
Automobiles & Parts -4.51% -1.34%
Basic Materials -4.55% -1.38%
Basic Resources -6.01% -2.84%

We have yet again a potential systemic risk event. Outside of cash and bonds, there is no safe place to hide as the above table show. One of my dismays in the last 'event' was that the risks were widely known, yet no money manager had the gumption to that diversification (country/sector) will not save you.

I've read few things about the market and its dispeptic jolts and gurgles than this quote sent to me some time ago and attributed to George Soros:

“Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited."

Unfortunately, the financial services industry provides little guidance to investors about the 'stepping off'. Rather the entire industry is devoted to to offering beguiling products and reminders that investors should be in it for the long haul. Let's see how that would have worked our for our Japanese friends:

(click to make larger)

The slope and direction of the arrow for our market depends on the outcome of the inflationista/deflationista smackdown.

The point? Understand that 'big stuff' that moves the markets. Most free advice is worth just what you pay for it. The conventional wisdom about money management and markets is mostly geared toward keeping your dollars working so that fees can be extracted.