Saturday, February 21, 2009

Sunday Investment Club

Back in January, we followed up on a Big Shot's advice about getting greedy when everyone else was frightened.

I suggested one good way to play long-term investor (figure 2013 before we can spend this money again) involved regular purchases of SPY, an exchange traded fund (ETF) that mimics a mutual fund -- the 500 biggest US stocks -- but can be bought and sold all day long. The plan of course is to do it once a month, or once a quarter, or whenever you pay your bills. Write the first check to yourself.

So far, my timing hasn't been any better than Mr. Big Shot's, the Oracle himself. But I still like the fear I see, the overwhelming opinion that nothing will work, and that no bank, or financial company, or retailer will ever make money again. The American Economy is dead.

Mr. Big Shot and I are betting not. How about you?

Check the time periods on these charts from ETrade. And read Corkface's Reasons to Be Afraid in comments. Get some perspective. Next week, maybe Corkface and I start dueling portfolios. Join us.

1 comment:

corkface said...

It's obvious that betting against the US has never worked out before. We won't bet against it here longer term.
Timing on the bottom of the financials is very difficult at this point because the banks still haven't disclosed the full truth about their balance sheets. We see evidence of that everyday. My concern is earnings. Where will they earn money in the next 12 months. They won't lend money for fear of the unknown and that's where the juice came from in the past. FRE and FNM need another 20billion to operate for the next 3 month and they truly are insolvent along with C and BAC(thanks to the bad deals for Countrywide and MER). We are de-leveraging not reloading.
The housing market is the key to the bottom here and with the tighter underwriting standards that are in place now and won't go away in the foreseeable future, I am down on the finacials and wouldn't even look to that group for investment. Maybe a trade here and there but not for accumulation. I even think HD could file here in the next 6 months.
Buffet is being ignored at this time. People are waiting for the next PONZE scheme to be exposed to the public. The PONZE stories will be big for the next 6 months.
Johnny Damon, Xavier Nady, VJ Sighn just had there assets frozen dues to the latest STANFORD PONZE story. What's next??? Capitulation??? People can't even sell for fear of losing 40 to 50 percent of their original investments.
DOW 6000 is the place for capitulation and then we re-think our bearish views.
It's a traders market. Take profits and re-enter on things that are working.
Balls on the table:
MBRK looks under pressure here and will trade to 2.25, 2.30 buy mid march. Cuurently at 1.70.

HBC is reporting 1st week of March, it sees 27. Shorted at 45.

Last one, TSYS. check it out. Text messaging play with strong growth story. Just came off a graet run to 9.95. If it gets back to 8.50 I buy it again.
I'm out!!!
Corkface