{"id":7203,"date":"2011-05-05T09:01:09","date_gmt":"2011-05-05T13:01:09","guid":{"rendered":"http:\/\/www.technologyinvestor.com\/?p=7203"},"modified":"2011-05-05T11:18:20","modified_gmt":"2011-05-05T15:18:20","slug":"it-suddenly-feels-awful-sell-in-may-and-go-to-cash-and-reits-for-now","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=7203","title":{"rendered":"It suddenly feels awful. Sell in May and go to cash and REITs, for now."},"content":{"rendered":"

Things have suddenly changed. Items:<\/a><\/p>\n

+ Everyone is dumping gold and silver. They made their money and they’re out. I personally still like gold, but I’m out of silver.<\/p>\n

+ The speculators have gone,\u00a0 inter alia, to mortgage REITs:<\/p>\n

\"\"<\/a><\/p>\n

The nice thing about these (apart from the fact that I have three on my “Stocks I Like” list) is their dividend yields:<\/p>\n

NLY — 13.8%
\nIVR — 16.2%
\nAGNC — 19.2%
\nANH — 13.9%<\/p>\n

The nice thing about these yields is the leverage they give you on the pricing of the stocks.\u00a0 They can fall. But until they’ve fallen their yield, you haven’t lost money that year. In actual fact they haven’t moved much in the last 18 months. They tend to bob up and down as their dividend gets paid.<\/p>\n

Several readers believe that these high yields “are too good to be true.” I’ve been studying their 2010 balance sheets, which have just come out and I’m feeling comfortable with their businesses. More about this in coming days as I finish my studies. Their annual reports are thick.<\/p>\n

Meantime, Annaly (NLY), the large, just reported hugely improved earnings. You can read their earnings press release here.<\/strong><\/a><\/p>\n

Things To Be Concerned About Regarding This Market <\/strong>according to<\/span> <\/strong><\/span>Barry Ritholtz<\/strong>)<\/a><\/p>\n

\u2022 Traditional measures of Stocks (P\/E, return on capital) suggest stocks are no longer cheap; Longer term measures of valuation \u2014 Q ratio, Shiller\u2019s 10 year P\/E \u2014 show stocks are actually pricey;<\/p>\n

\u2022 China is on the verge of rolling over, falling nearly 8% in a single session; That wiped out three months of gains;<\/p>\n

\u2022 Defensive sectors \u2014 especially health care, but also staples, telecom and utilities \u2014 have found a bid. Often telegraphing a reduction of buying by fund managers;<\/p>\n

\u2022 Way too much cap weight is tied up in a handful of stocks. Apple (AAPL) is responsible for far too much of the Nasdaq gains than is healthy.<\/p>\n

\u2022 The rally that began March 2009 \u2014 now well over 2 years old \u2013 may have gotten ahead of itself;<\/p>\n

\u2022 The rampant speculation in Silver and its collapse is a reminder that money that piles into a sector very quickly heads out the door ever faster;<\/p>\n

\u2022 Assumptions about earnings seem to project double digit gains forever;<\/p>\n

\u2022 The end of QE2 removes a significant bid under equities and bonds. It also will allow the dollar to rally, potentially punishing commodity traders;<\/p>\n

\u2022 While earnings have been good, future guidance from companies is starting to moderate. This does not bode well for earnings supporting SPX 1400-1500 future levels;<\/p>\n

\u2022 Speaking very generally, the low volume Markets just feel tired here.<\/p>\n

To Barry’s list, I add this morning’s weak jobless claims. he number of people who filed new applications for jobless benefits leaped 43,000 last week to 474,000, the highest level in almost nine months. Yuch.<\/p>\n

One play and one musical we just saw.<\/strong><\/span><\/p>\n

\"\"<\/a><\/p>\n

Jerusalem features a stunning performance by the start, Mark Rylance. the second is s musical about an ultra-sad tragedy — Jewish death in the Warsaw ghetto. Both are worth seeing, though you may not “enjoy” either.<\/p>\n

Cinco de Mayo.<\/strong><\/span> The fifth of May. Today. It commemorates\u00a0 the Mexican army’s unlikely defeat of the French at the Battle of Puebla. It’s a big celebration with my friends in California’s south. It’s celebrated hardest by rich Californians who think illegal Mexican immigration into California is the source of all California’s crime problems, while employing those very same Mexicans to clean their houses. Go figure.<\/p>\n

Classic funny Johnny Carson video.<\/strong><\/span> It features Sgt Friday and theft of Johnny’s clappers. Click here<\/strong><\/a> and die laughing.<\/p>\n

\"\"<\/a>
\n<\/strong><\/div>\n

Harry Newton who laments the end of the Cherry Blossom season. Fallen cherry blossoms and my tennis sneakers:<\/p>\n

\"\"<\/a><\/p>\n

\"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Things have suddenly changed. Items: + Everyone is dumping gold and silver. They made their money and they’re out. I personally still like gold, but I’m out of silver. + The speculators have gone,\u00a0 inter alia, to mortgage REITs: The nice thing about these (apart from the fact that I have three on my “Stocks […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-7203","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/7203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7203"}],"version-history":[{"count":0,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/7203\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}