Financial Storm Clouds Form on the Horizon
By Todd Harrison Sep 05, 2012 10:20 am
Capital preservation is the first step toward wealth accumulation.
We all know the story about the boy who cried wolf, and I make it a point not to cry and to avoid wolves. A few weeks ago, my intuition got the better of me and I posed the question, Is the Stock Market Setting Up for a Crash? Knowing thyself, I should have sat on that column for a month or so as I'm typically early and yes, often wrong. Still, I can't shake the sense that something wicked this way brews; what I am unclear on is the timing, and as we know, timing is everything.
On September 18, 2008, I penned a column after enjoying a delicious dinner at BLT Steak in Manhattan, and shared on Minyanville:
I walked into a restaurant last night and, on the way to the men's room to splash water on my face, I stopped and looked around the room. As I watched the smiling, unsuspecting patrons, I felt like jumping on a table and screaming, "PAY ATTENTION to what is happening!"
The S&P 500 traded 45% lower over the next six months.
On May 3 of this year, a week or so before I was raced into the OR, I shared a similar vibe:
I've been plenty wrong before but I would be remiss if I didn't share that I haven't slept much the last few nights, and that "Sleep-O-Meter," long dormant, has a pretty powerful track record. I tried to enjoy a charity benefit last night but as I looked around the ballroom, a distinct intuition emerged, one that hasn't happened since September 2008; I wanted to jump on a table and scream, "PAY ATTENTION TO WHAT IS HAPPENING!"
The S&P dropped 10% on a straight-shot over the next two months.
I am not jumping on a table at present-too many crosscurrents with election agendas, European survival hanging in the balance, and a Federal Reserve Chairman who will stop at nothing to flood the system with liquidity and preserve his legacy (the jury is still out; remember, the world revered Alan Greenspan for many years). I am, however, imploring you to see all sides and remove emotion from the trading equation.
Fortunes will be made and lost into year-end and beyond; I remain of the view that capital preservation is the first step toward wealth accumulation.
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No positions in stocks mentioned.
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