A quick note before I head off to McCormick Place:

Over the past 2 weeks, our cash levels have risen appreciably and equity exposure is now below 50%. A variety of factors, most of which were specific to individual holdings — not an overall equity call — led to this shift.

This was not a market call; however, given the ambiguity of the economic outlook versus the strength of earnings, we are fairly comfortable with high cash and bond levels. (Our tactical portfolio did go full defensive on May 1, but that is driven by quant metrics and is automatic).

Rather than forecast the end of the world, we are making a list of potential buys. Many of the names and sectors I am interested in are in a no man’s land in terms of risk/reward: They are significantly above an ideal entry, but far below what qualifies as a breakout.

Thus, I’d rather buy them when they are either a) cheaper (with more sentiment negatives) or b) higher (where they have confirmed a breakout).

Here, price direction is a bit hazy. I am happy to wait for better entries

Category: Investing, Technical Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “Outlook: Reply hazy, try again”

  1. constantnormal says:

    Many thanks for the timely assessment …

    but … MY GOD, MAN !!!

    I’ve grown accustomed to your roiling of the markets, by merely setting foot out of The City, but really sir, this is TOO much!!

    Not only seriously rattling the world’s financial markets, but toppling TWO governments!?!

    And you even provided a warning (but on Sunday, instead of prior to 4pm EDT on Friday, when it would have been actually useful) …

    I think I’m going to have to fire off a letter to the SEC, complaining of your incessant market manipulation, and demanding that whomever makes your travel arrangements has their activities scrutinized closely.

    This is a “free and fair market”, sir … and we simply cannot allow these shenanigans to continue.

    In the future, please ask all conferences and meetings to be held locally, preferably within a block of your offices …

  2. dead hobo says:

    There don’t appear to be any liquidity crises on the horizon so there shouldn’t be any big drops. I’m still half expecting the head of a head and shoulders to form soon, followed by a reverse head and shoulders this fall, followed by a decent rally. But I still can’t see the trigger. No liquidity issue = no big drop. Maybe the algos will learn a new trick on painting the S&P.

    Thus, I think there are no great times to buy or sell today. Unless you luck out on a buy at the bottom or sell at the top, just picking up some free coin is a good goal. To that end, I think you will make money if you buy at any point and hold it long enough, measured in weeks. Then sell. Then repeat. I don’t think you can lose unless you have a forced sell to deal with. Each dip will probably come back and at least return your investment in full.

  3. AlexM says:

    As I watch the panel, I am reminded again how much I dislike everything about Mauldin from his mocking disrespect to his arrogant posturing. Blech.

    Barry, very interesting comments and panel, thanks for the link.

  4. DarthBeta says:

    The beer selection and skirt steak at Sweetwater (mich ave) are outstanding

  5. Through the Looking Glass says:

    “Rather than forecast the end of the world, we are making a list of potential buys. Many of the names and sectors I am interested in are in a no man’s land in terms of risk/reward: ”
    Like Soylent Green ?

    SEOUL, South Korea (AP) — South Korea has seized thousands of smuggled drug capsules filled with powdered flesh from dead babies, which some people believe can cure disease, officials said Monday.The capsules were made in northeastern China from babies whose bodies were chopped into small pieces and dried on stoves before being turned into powder, the Korea Customs Service said.Customs officials refused to say where the dead babies came from or who made the capsules, citing possible diplomatic friction with Beijing. Chinese officials ordered an investigation into the production of drugs made from dead fetuses or newborns last year.
    Is there anything Chineses wont eat?. If they arent selling Rhino horns or Tiger balls its powdered babies?

  6. Sunny129 says:

    My take from the panel discussion at CFA this morning (webinar)

    Bimodal market with asymmetrical bimodal response in spurts by CBers to ongoing crises on both side of Atlantic.

    Volatility here to stay. Make the volatility work for you and not against.
    Trading (options on long/short ETFs) with hedges in oil, gold, mining shares, financials but long on ETFs with div in all sectors/industries across the globe!

    This is the latest strategy I got myself evolved into ( after buy-hold from 1982-2000, learning options, ETFs+) for the past 2-3 months. So far so good!

  7. Greg0658 says:

    webinar .. think my blastout came at ’98 secular bull ? wtf ! ya for paperpushers and MIC and outsource’g factory builders .. and wanted to blurt out to Rosies close question “hows the Olympics and Rio2016 fit into that?”

    .. I think it was cool – colored tie remarks and all .. the video guys got the 1 camera shoot together as it progressed ie: zoom out abit, pan over slowly, zoom in (never to fast but just right) .. thanks for the headsup :-)

    closing comment past my last HuffPo last night – it sure helps to have opm cash in accounts in this world

  8. MayorQuimby says:

    This pretty much mirrors where I am at to a T although I am a bit more bearish and think the peak of this earnings cycle might be here in which case the downside risks increase. I think Europe is an excuse to lower prices in the meantime.

  9. VennData says:

    Buy, hold, rebalance annually. Stay the course.

  10. Greg0658 says:

    BRs session has been archived (others as well):
    http://cfapodcast.smartpros.com/web/live_events/Annual/Panel/index.html
    1h:6m

    might add – when I signed in at 5 to 9 there was about 70 viewers on line .. there was a live click in/out viewership tag the whole session .. I saw it get as high as 500+ < 600

  11. [...] that this is not the wishful thinking of  a permabull, as we are now down to 40-50% equity exposure. As noted, I’d like to see lower prices to put some equity exposure back [...]