Last five days:
You have six defenses against days like yesterday — with its 2.2% drop:
1. Stay completely out. One reader wrote he got back into the market in early 2009, had doubled his money by early 2011. He felt uncomfortable with the speed of his luck (and the market’s high prices). So he sold everything and is 100% in cash. It is legitimate to take money off the table.
2. Keep your stops tight. Sell when your stocks drops or they look squirrely (with bad news, or bad karma (e.g. Nokia, RIMM)
3. Have a nice position in gold. I like SGOL. It actually rose slightly yesterday. People tend to flock to gold when the economy look awry.
4. Have something in high yielders, e.g. NLY, AGNC, and ANH. They tend to bounce less when non-dividend paying stocks did what they did yesterday — plummeted.
5. Have a decent chunk in bonds, especially tax-free muni bonds. You should have enough in bonds so you can live off the interest — if you ever need to.
6. Watch tennis and ignore the gyrations.
Personally, I watch the news on my chosen stocks (see right hand column). I eye the sentiment. I pick it up with Google Alerts on each stock. If I feel excessively squirrely, I’m out. I sold CAT halfway through yesterday. It later fell further. If it drops much further I’ll buy it back. The fact that it only costs me $7.95 to buy and sell a position makes playing defensive easy.
I remain positive in my outlook. Europe will ultimately solve its debt problem. This is old news. China is slowing slightly. This is old news. Unemployment in the U.S. remains horrible, but the statistics lie. Many “unemployeds” have figured part-time jobs, especially those paying cash. My gauge of high present restaurant activity makes me wonder about the “unemployment.”
The French Open 2011 ends this weekend with great matches. This schedule is only a guide. Everything changes. If it’s wrong, surf between The tennis Channel, ESPN2 and NBC.
Harry Newton who feels best when 1. He plays tennis for one to two hours, 2. Eats less, and 3. Has occasional 15-30 minute naps. I eye the overweight shuffling locals and wonder why they ignore the obvious.
Harry, Wall Street, New York Times ect just don't get it in the “real world” of America…..the economy sucks, jobs suck, home sales suck, inflation suck….corporate shows life due to “cut backs” and American ingenuity….but the rest of America suffers….its like the house is on fire but we saved the garage….so lets celebrate… The White House lumbers along as if they are “deaf” to what is really going on on “Main Stree” of middle America…..lets face it, we're in for a long haul recovery that is painful. David
David….let me just add a little insight to your comment. Yesterday I spoke to a close friend of mine who is up in Canada doing some business and playing a little golf in the Prince Edward Island region. This is an area he visits often and what he told me was rather interesting. He said that the amount of autos with US license plates on them was by far the most he had ever seen. Americans are securing real estate and moving assets (read gold and silver bullion) into any type of secure vaulting they can. People are afraid of trying to bring a large amount of bullion across the boarder through customs. He told me people are moving bullion up the coast into Canada by using boats. As far as cash goes he said people are basically uninterested in putting large amount of money in Canadian bank and brokerage accounts because the US feds are beginning to really crack-down on “off shore anything.” US citizens are essentially laundering US dollars through the buying and selling of precious metals and he also herd people talking about selling diamonds. He said things are really rocking up there and conversations he had with other Americans is simply “get out of the USA.” These are for all intents and purposes wealthy people who have the means, who are protecting themselves and their families.
Harry, whats the word on the upper west side regarding any of this? Probably very hush-hush but I'm sure you've heard a whisper or two.
Hi Ron.
I'd love to see the right wing move to Canada and live with the laws there:
In Canada you do not really have “rights” per se. They have a Charter
which gives people basic human rights but things like “freedom of
speech” and “the right to bear arms” among other things are unheard of
in Canada.
Doing things you take for granted in the USA can get you in quick
trouble in Canada. Speaking out against homosexuality or racial
minorities will land you in court there fast. Speaking against the Queen
is also forbidden there (but you can “nicely” speak against the
government).
There is also no “freedom of the press” there. The government or a court
can- and sometimes does- issue gag orders (called publication bans) on
things they don't want published.
There is also no right to “bear arms” in Canada. Pistols are almost
illegal for anybody but the police and rifles and shotguns must be
licensed and you have to have a license to buy ammo there. And getting
caught with an “assault rifle” will earn you about 5 years in a cold
Canadian prison!
The dilemma we have between the US and Canada is our 'freedom' in these areas, hardly unlimited, but better than Canada's for sure, versus their more conservative economic government model, better currently than here.
Thank God we don't have an unbridled left wing here in the USA because without a doubt everything you mentioned would become law here.
yawn..