On lase Friday, I read an article saying UBS had sold off all of their equities positions. On Thursday, I watched CNBC and this manager of one large fund said he was not totally out of the stock market, not that he did not believe the recent bull rally might continue but he believed it was now NEUTRAL and he would only get back in when it started going side way. I found his comments quite interesting. Then when I tried to find more reference material and saw that many had said the SMART MONEY (institutions) was now out of the stock market while small investors had started entering the market.
I wonder it would be time to leave the party? Thoughts?
Please share your long-short-cash positions with us if possible. Do you have plan to leave the party and planning to stay put?
P.S. I believe I would take a closer look at both my wife's and my 403b retirement accounts, especially our current ones with TIAA-CREF, it may be time for us to go on all cash position. Of course, my timing is never perfect.
1) There is more to this "recover." Unemployment is still too high and consumer spending (and pay checks) too low. Slow growth will continue for several years.
2) Hedge funds are not here for dividends; they are only interested in timing the market. They will buy, then post a blog (CNBC interviews are like advertisements) telling you to buy. They will sell, and then post another blog telling you to sell. "Big money" is not always "smart money." Example: Bill Gross comes to mind: How many times has he said he was long or short US Treasuries, only to end up with egg on his face?
My point here: Ignore the talking heads. More often than not, they are trying to manipulate people (small retail investors).
3) Times change and that does warrant adjustments to your portfolio. But this does not mean going to 100% cash. Yes, it's okay to build cash and wait a few months for an opportunity, but waiting for the next 2008 is foolish. JMO
4) "believed it was now NEUTRAL and he would only get back in when it started going side way"
Isn't "neutral" the same as side-ways?
To answer jman's question, my taxable account is currently 70% invested and 30% cash or equivalent. I wouldn't mind being more in cash, but I rely on the dividends/distrubutions to pay the bills. My retirement accounts though, probably more like 55% invested right now.
To respond to sonnenwayne, I forget the source of where I read it, but I do remember one article making an interesting point that if a very patient investor stayed extremely conservative with their money until the trailing 10year Price/Schiller Index was below an extreme valuation of 10, that investor would greatly outperform someone who stayed 100% invested as a buy and hold for life. This article came with a few caveats though, the main one being history is not really a guide for the future. One has to hope in doing this that there will continue to be massive crashes like 1983, 2000, and 2008 where the Price/Schiller index is
Wayne.....good point about Bill Gross. Recently, when the 10 year rate went up to the 2.70% area, he said that he thought it would retrace back down to the 2.00% area. He's been dead wrong about that prediction, if of course, he was actually sincere or just blowing smoke.
I'm currently about 40% in cash. Am comfortable with my holdings which are mostly div producers and some small biotech positions. Money is very spread out with one exception.
I've taken a large position in NOG (Bakken oil driller) that got beat up last week. I've done extensive research on it and am comfortable with my position at this time. It closed Friday @ 12.33 and my average cost is 12.84, so I'm a little under water going into Monday.
I appreciate the discussion and I'm perfectly willing to look at things from a "devil's advocate" perspective. But I won't buy/sell because someone on CNBC says so. I'd need concrete facts to justify why.
Thanks to everybody for you invaluable opinions. I really appreciate it because there is a lot one person can miss, but by listening to others and share with other experienced and/or smart investors, one can indeed learn a lot, whether we will agree with each other or not. I sincerely hope more of you will share your thoughts with us here. Again, thanks. J
Nice discussion J, Wayne,and KEL.
I've been playing defense with about 25% in cash.
Last week sold half my RSO ( had never sold it before) but it was time.
I see the market whip sawing and going side ways for a while on lower volume. IMO