I hate Vegas and 99 percent of you should be hating and staying away from this market.
You are missing nothing.
I am trading with some moderate success, but most traders are just losing money. I continue to buy vicious dislocations and sell major rallies. It is working, but it is work.
I know there are ‘Value Stocks’ to be had, but I firmly believe that once a Company has gone public, it can’t possibly be a value stock. I believe Value Investing is for a handful of experts in this world and so pay the freaking premium and own Berkshire for that.
In this market, TIMING is EVERYTHING and if you can time it twice in a row (I have not), you will still get burned :) .
Stock picking will make you broke right now. Value Investing will bleed you dry.
Nobody owns stocks. Why should they? If you own them, like I have during October, it’s to flip to another person within a week. The stocks that most people are owning and trading these days are just derivatives. This will end, but I still have no idea when.
Hedge Funds must blow up as there are too many entrepreneurs doing the exact same thing in the space. This process will end too and the next set of hedge funds will be leaner, smarter and have a better chance of success. More importantly, the compensation structures will likely change. My pal Roger Ehrenberg has been so right and on top of this whole subject so go read up.
There is NO one with the magic formula. I have linked heavily to three people this year Roger Ehrenberg, The FLY and recently to StockTwits for trading ideas. Of course there are more of you making money, but I am trying to keep my reading light and my eyes on the people that continue to be right. I am looking to survive and possibly thrive and trying to eliminate the disaster.
I have made it this far in 2008 and just don’t see the ‘Fat Pitch’ to the long side I was hoping for. We get these 1 or two day rallies.
Stocks suck and they will get suckier because of the weasily games Wall Street and the FED is playing with us. We continue to see the common sharehoplders get diluted. We don’t see buybacks because the retailers and other growth stocks were busy borrowing money to BUY back stocks from 2003-2007 at insane prices. Now they are saddled with debt and no growth.
If you want to own Corporate America now, you are much likely better off in the bond market considering the dislocations, but I have no expertise in this space. I will bide my time.
Stay light and build your business. Call on your customers and enjoy your families.