2008…Could Have…Should Have…

Posted by Howard
on December 28th, 2008

Dinosaur Trader asked many financial bloggers to submit their favorite post of 2008. He will be posting them all sometime this week. Here is last years grouping .

I am terrible at tagging and therefore finding just one is tough seeing that I had over 1000 posts in 2008.

I do know that most of my stock selling happened in January and my biggest mistake was to not just continue selling and get 100 plus percent short.

The post I picked for Dinosaur was from February, 2008 entitled ‘Commodit Boom…Over? ‘

Indeed it was. Here is what I wrote:

The CME or ‘Da Merc’ may be signalling an end to the commodity boom with today’s price crash (down 15 percent just today and 30 plus percent on the year).

Hear me out.

Price rarely lies. I was sitting with a friend today chatting about the foreclosure boom in Phoneix and discussing his S&P ETF investment of 2001. He is underwater.

As we all know, buy and hold is a lie. Trading for a living is almost impossible, unless you are the house, and despite the fact that 33 percent of stocks end up delisted, there is not a shortseller on the Forbes 500 list.

Investing in yourself – being an entrepreneur – and money management are the keys to wealth. The truly wealthy invest in themselves and that’s why this blog focuses on the market AND entrepreneurial activities.

For those resting on the China is unstoppable, oil is going to $150, commodity argument…welcome to the business cycle. No matter how steroid induced the FED gets with money supply and intervention activities, they can only extend or the inevitable nature of the business cycle.

‘Fear and Greed’ can’t be stopped. We have Prozac, Ambien, Monster Energy Drinks and Speed..which work, but again, they just suspend reality and that’s just for the lucky few :) .

The collective mass, which is the market, is not drugged. They will always FEAR and GREED us into cycles no matter what the FED does and Cramer says.

I continue to do less and focus on building businesses with smart people. There are deals out there. They will even start springing up in the stock market. If it was my investing style, I would be licking my chops, but I am a momentum guy in the market and it’s gone. If I could flick a switch and go short, I would have done it in January. That’s when my stops were getting pummeled. Only FLY has done it well in my blogroll and I have continued linking. The perma bears are also right, but they will miss the first 500 percent of the next up cycle so I don’t count them.

Instead, I do less, preserve capital and jab occasionally from a position of cash strength (SKF, FXP). I am not bearish, but concerned. I have been bearish and all that did was get me miserable and looking down when I was born wired to look up.

I continue to urge those that ask that preservation of capital is key. It is a nasty investing environment and you better not underestimate the power of the downside momentum

For the most part, I heeded my own advice and if not for owning Google at $410 once the trend was clearly kaput and Russia (biggest loss of he year) and overtrading leveraged ETF’s, the year would have been outstanding. Even so, I am pretty happy with the advice doled out on this blog for one of the worst years in stock market history.

My goal as always is to stay in the game and focus on the opportunities. Next year will have oodles of ‘Could Have Should Haves’ but that’s ok. My goal is to avoid the ‘What The f#$#$k was I thinking?’

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.