New Column up at Real Money (03/03/06)

RealmoneyMy latest Real Money column, "Enjoy the Rally but Cull the Herd" is posted (sub only). It is based on this weeks admonition to Get Darwinian on Your Portfolio!   

I also speak to several technicians and portfolio managers, discussing what they are culling.   

Here’s an excerpt:

Despite the negative economic future, with all these positives and the indices near new highs, why have any concerns beyond the near term?

The answer lies between the long and short term. Over the intermediate term, there are numerous technical warning signs. I use these signals to help alert me to a possible change in trend or character of the markets. Investors ignore these signals at their own peril.

That all said, investors want to participate in this current action, especially since they know that the last leg up in a bull market is often the most profitable. Recall that from October 1999 to March 2000, the Nasdaq doubled. But there is good reason to be concerned too.

Short-term bullish, longer-term bearish, intermediate-term confused. What’s an investor to do?

Cull the herd.

The most amusing thing about this is the reaction it generates. The Bulls are convinced I’ve joined them, the perma bears think I’m a sellout. Anyone who’s been reading me long enough knows this is the same old sameold I’ve been yakking about for a year. I just keep edging the top date forward until I get the red market signal that its time to short.


Enjoy the Rally but Cull the Herd
3/3/2006 3:08 PM EST

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You know you are a Permabull when…

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Real Estate Round Up

This past week saw a lot of Real Estate related data, all of which fits our long term thesis about the macro economy and what’s to come over the next few years.

For those of you who may be newer to the site, we have been dicussing this for quite a while: starting in December 2004, we noted how Real Estate was a prime driver of the economy, and in Spring 2005, how new hiring was overly reliant on the Real Estate Sector; in August 2005, we called that Housing was beginning to show signs of cooling, and that this would eventually wreak havoc on consumer spending. In the Fall 2005, we noted how dependent GDP had become on Mortgage Equity extraction. You can find all of these by using the site search function, right sidebar.

Now as  of March 2006, most of these concepts have become widely recognized and (mostly) accepted — but when they were first introduced here, there was no small amount of incredulity and pushback surrounding them.

Looking forward, I see rates rising, housing cooling further, the consumer cutting back, and the stimulus driven economy slowing, if not slipping into an outright recession.

On to the round up:

Existing Home Sales Slip 5th Consec Month

Home Foreclosure Surge

Home Prices Decellerate

Supply Up, New Homes Sales Down

New Homes Sales: 4th Drop in 6 months

• And the most ironic piece of all, The WSJ’s Greg Ip Discovers Data Manipulation

There’s more all over the web if you want to surf, but that’s the main gist of it.


UPDATE March 5, 2006 4:44pm

The NYT’s Sunday Magazine is all about Real Estate

Go to Introduction: The For-Sale Society

See the Sunday Times Mag TOC after the jump . . .


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