How did I reach my breaking point on Friday?
Well, I haven’t been happy about the action for the whole month of March and this week was simply the last straw, where I feel the risk of beign long now outweighs the likely rewards. Even all the bullish anlaysts in 12 of 13 of our beloved IBanks are “only” projecting the S&P to gain another 7.5% for the year. That’s not even 1% a month so excuse me if I decide it’s time to take a 7th inning stretch after we’re already up 70% of 77.5% projected over 2 years. As I said when reviewing our Buy List, where we are closing out 22 of 37 stocks – you just aren’t supposed to make an average of 28% with 64 winners on 66 picks in 6 weeks – it gets to a point where it’s just foolish not to cash out and take a rest.
Make sure you check out our latest round of Disaster Hedges as well, “5 Plays that Make 500% if the Market Falls” is a good way to keep your toes in the water! In last Weekend’s Wrap-Up I was “Still Trying to Get Bullish” and I was wrestling with killing the Buy List then – doing the full review this week is what killed it for me because – if I go over the fundamentals of 37 of my favorite stocks and can’t see more than 15 plays I’m enthusiastic about keeping – then it’s a good bet I’m not going to be too wild about the rest of the market either.
If I were a real bear, this would be great and I’d just be running around yelling SELLSELLSELL but I am, believe it or not, a generally bullish guy who prefers to play an up market but I am also realistic enough not to fall so in love with my positions or bullish premise that I don’t know when it’s time to give things a rest. We haven’t had a proper pullback, we haven’t had good volume to the upside (Barron’s raised that concern this weekend) and we haven’t addressed many, many problems that are still out there.
Monday Morning – Moody’s Makes More Negative Noises
Moody’s got us off to a fun start on Monday morning, saying the US and UK are “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose – a statement they softened later in the week but now the IMF…