From the beginnings of the crash and financial panic until last week, my diverse holdings of about 85-100 names have moved in extreme correlation, so that on any given day I would be looking at all green or all red across the list, except one or two with hard catalysts, usually a biotech clinical study result/ approval or an earnings beat/miss.
Early this year, I noticed less correlation across sectors in the portfolio, and now the trend has intensified.
In the last few weeks, I have started to see names moving entirely on their own merits (or lack of) without catalytic motivation.
Just one sign that the macro post-nuclear black cloud unleashed through sept08-march09 has dissipated.
Various housing markets are starting to light up. LEIs look good. Corporate balance sheets are fully charged. With a good FC resolution, we will probably transition to a stock-pickers market with moderate upward bias vs the lockstep whipsaw lashes of these 5 years of struggle and flight, when thundering heards clashed night.
Through this 5 years, my personal experience has been of increasing returns, increasing income and increasing opportunity. Noone I know who works has faced unemployment, though some have not recovered asset values.
But I see how the forcasts of Daniel Bell as early as the 70s and Herrnstein/Murray in the 90s have come to full force realization. As technology and productivity have accelerated, we now find ourselves in the Two Americas of John Edwards.
I know it hasnt been discussed among pundits and the beltway people, but I hope the new Administration includes a prominent place for Robert Reich. We need to close the gap between the gifted, talented, charismatic, robust and 'the other half' so that those who lost the DNA lottery might not be left so far behind.
I cant get baggers with ETFs - only fractions. If you look at XLF for example,, its still well down from pre-crash levels, yet in mar09 we had a dream world of dart-board individual stock 10 baggers, some of which remain in many a portfolio just like back in the day certain albums were in everyone's record collection.
With an ETF, even a sketchy tripleETF, I am not so sure I could have gotten the over-all 3.5x return that Ive done across the portfolio since the 09 bottom. Its hard to trade out of a lot of the names because they are virtually all capital gains at this point.
I'm going to check the tripleETFs performance off of the mar09 doomsday bottom and see if maybe I could have been lazier. I do trade the triples some.
People trade their convictions. If you have market timing conviction, you trade in and out and use derivatives. If you have 'fundamental' conviction, you buy and wait for the stock to reach your conviction price traget. And then in my case you hold too long because of the cap gains anxiety.
In terms of keeping up with them, I've gotten used to it. it does take getting used to it.
I dont use derivatives much because personally for me, its just harder to control cap gains with them.