Deep Market Thoughts…Here's My Plan

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  • on July 7th, 2008

I am not smart enough to bet on a crash. I did say here a few weeks ago we would see a Dow below 11,000, but we are now pretty much there. If we crash, who knows really where we stop,…a few YUTZ’s will get famous and survive off it for 20 years in Business Week and Barron’s, but that won’t help you.

With the Dow down 3,000 plus points from the high and China down 50 plus percent, I need to put on my positive hat for a moment.

I have been selective shorting stocks and ETF’s to stem part of the bleeding to my mainly long only accounts, but as of right now I have pretty much booked profits other than my China short (FXP).

It is taking up too much brainpower and energy and a lot of meat is off the bone.

Fannie ‘freaking’ Mae is printing $15. That is a tremendous blow to our housing industry and even capitalism at this point. Citibank is $15 as well. Shorts win.

Congrats again to the shortsellers, their patience has been rewarded, but other than the remaining highfliers, which are crowded with shorts, I don’t want to be short anymore.

I am starting to consider long ETF’s, the strongest sectors into this selloff and otherwise, honor my stops, which are coming fast and furious and just more watching. I have traded many selloffs since 1998 in my fund and they are all different. This one is the most scary. I say scary not because I am a wuss, but because I have survived very well so far, am now 42 and appreciate the nastiness of bear markets. It’s a cleansing process in the market and the speed and acceleration is getting pretty damn nasty now.

What makes things worse is the complete destruction of the financials which is the largest (don’t quote me) percentage of the S&P. Some fundamental changes and more important, time, will have to take place for a lasting new bull market. It’s not just about price drops and value. No one believes the value.

Putting my list together for a Dow break of 11,000. Your ETF suggestions are appreciated. No rush.

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.

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