Good week in the market
Reflecting on my latest posts, I had been considering getting more invested in stocks and less in cash/short term bonds. Well, that would have been an excellent move! As late as Monday I was getting ready to pull the trigger - that would have been perfect. Alas, few things are perfect (my wife would differ!) and that's part of the game. There was a lot wrong with the rally this week if you weren't invested. Then you could point at the weak volume or the soft high-low list. But if you were long this market, you wouldn't care at all about those things - you'd be feeling good about the gains. And if your position was like mine, you might be philosophical that we missed lots of decline so this was expected or that these gains will be short-lived so not too worry. We won't have any of that and instead feel a fair amount of pain that we are still light. Yes, it's very nice that our bonds continued to rally and that has been helping. And it's very nice that our stocks that we do hold were up nicely. And of course it's not like we lost money this week.
But we get paid to maximize returns and to reduce risk so in that regard this week is less of a problem than my sleepless nights otherwise suggest. The fact is, the market tightened up really well, the volume was good for late August, and the rally feels right. Except for the season - maybe the crowd comes back after labor day, loves the level and sell sell sell. The large cap names look great here, mid and small are less desirable. But the puzzle pieces are not yet all in place.
It's likely the market will pause and allow entry points along the way. And it may be a good idea to scale into them. But the downtrend could easily resume, especially if someone remembers that the market was never too keen on Greenspan's soft landings. So why should Bernanke's get more respect?
We remain patient and flexible and remind ourselves that one week does not make a market. But is sure is convincing! Enjoy the weekend.
Please visit our website for more information www.GellerCapital.com
But we get paid to maximize returns and to reduce risk so in that regard this week is less of a problem than my sleepless nights otherwise suggest. The fact is, the market tightened up really well, the volume was good for late August, and the rally feels right. Except for the season - maybe the crowd comes back after labor day, loves the level and sell sell sell. The large cap names look great here, mid and small are less desirable. But the puzzle pieces are not yet all in place.
It's likely the market will pause and allow entry points along the way. And it may be a good idea to scale into them. But the downtrend could easily resume, especially if someone remembers that the market was never too keen on Greenspan's soft landings. So why should Bernanke's get more respect?
We remain patient and flexible and remind ourselves that one week does not make a market. But is sure is convincing! Enjoy the weekend.
Please visit our website for more information www.GellerCapital.com
posted by David Geller at 5:07 PM
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