Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Take Profits and Get Out!


Time to hunker down, not panic.

Should old acquaintance be forgot,
and never brought to mind ?
Should old acquaintance be forgot,
and old lang syne?

I realize it's a couple of months too early but has there been a more appropriate time to sing "Auld Lang Syne"? It was a month to forget but it could finish with a memorable flourish as stocks appear to be gaining traction heading into November.

The thing is there really wasn't anything to celebrate yesterday, at least not on the economic front. The GDP report was a disaster once the layers were peeled away. Consumers aren't consuming like they once did and while I believe a large part of that has to do with the kind of massive scare from the media that made Orson Wells famous (War of the Worlds). The bunker mentality has folks shaking in their boots, even folks with jobs, paid mortgages and money in the bank. Yes, those two people are worried now. I'm kidding, this is a large segment of the population to be sure, but nobody is whistling past the graveyard or the bank these days.

Americas aren't cool and not even pretending to be cool. Some are outraged. But even that feels like it's shifting to an ambivalent indifference. I think we've sailed passed the panic stage and it's all about hunkering down. The big question is whether we are hunkering down so much that whatever we fear comes to fruition by our overreactions? I'm not belittling the circumstances or downplaying the threat but I think there is a herd mentality in the media and elsewhere which is fanning the flames of angst.

So why is the market moving higher? I've always said a great company's stock could be overbought and a so-so company's stock price could be oversold. I think we are in a place like that where the market simply is oversold based on current conditions. It may be oversold based on the current quarter, too.

I actually believe the current valuation of the market reflects a short-term recession. That is the quandary; most market observers think this will be a severe recession. We'll have to go back to the drawing board if that is the case but for now we are playing it so close to the vest that what happens weeks and months from now isn't being factored into stock selection and action. Case in point, my firm took profits on no less than nine positions yesterday including a 26% gain in KB Homes (KBH) and a 20% gain on Ninety-Nine Cents Stores (NDN) even tough these were featured on our buy and hold service. Right now it's about buy, make money and get out before getting run over by a bus or Mac truck. Plus, if you could make 20% in a few days that's fantastic. If you still believe the reverse psychology Wall Street fed you about how awful it is to make money too fast then shame on you.

Talk about hypocrisy. All the commercials talk about the "long run" and "safety" but all along those same Wall Street firms were taking your money and trying to do things with it that would make even the Marquis De Sade squirm. Folks, you'd better learn and prepare to pick your spots and pull the trigger on buying and selling. There were some grand slams this week including First Solar (FSLR) up 22% yesterday alone and there were not enough names in the database (Wall Street Tracker).

One thing to remember as well is that at some point even real long term investors -- you know folks that hold positions for more than a week -- will have to take the plunge. Sitting in your foxhole and reading most newspapers will only mean by the time you crawl out the world will be healed and stocks will already have recovered and then some.
< Previous
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos