Today's Market
by Dr Invest
Now that the Republicans and Democrats have kissed and made up, at least until May, the immediate economic crisis is over. Now it is predicted, with the continued help of the stimulus package investing $80 billion a month between twist and mortgage buy-backs, the sky is the limit. So break out that money and get investing, so they say. Err... would you like to buy a bridge, the Brooklyn Bridge to be exact.

My conservative investment strategy has been beat to death, revived, and beat to death again, and yes, revived yet again in the whirl economic trends. I would have been relieved had the market only declined enough to hit my stop-sells, but now I'm elated that I might just get back to what I originally paid to take my present positions. By the way, my positions have been slowly improving, but still look anemic to me.

Here is today's positions:

This is almost pathetic, but I am proud to see that my overall position has finally returned to the green. With a whopping $7.66 profit, amounting to a gain of .12% today, I'm feeling just pretty rich. Obama best get his minions of tax collectors together to collect their share of these capital gains.

Invest or Not Invest

The real question right now is whether to get positioned further in more stock purchases. I am reluctant to invest further when stocks are largely overvalued, the government continues to have the economy on life support through their stimulus program, and where our government has total disregard for indebtedness.

Like every economic collapse of the past, the participants in the market are ELATED and EXUBERANT just before the calamity hits. Holding the above portfolio in past years would have easily brought 6% gains or higher, instead this portfolio reflects the inherent weakness that has permeated the market.  Market returns are pathetic, the risk is high for loss, and people are elated that the market is rebounding. Obama even referenced in his speech to our nation, saying: "and the economy is rebounding". Sorry Mr. President, which market are you talking about?

Here is the down and dirty from an analysis view:  http://hussmanfunds.com/wmc/wmc130122.htm

Hussman writes: Last week, the S&P 500 advanced the extra 1% required to re-establish virtually every “overvalued, overbought, overbullish, rising-yields” syndrome that we define – syndromes that have appeared at or close to the beginning of what investors can easily recall as the singularly worst set of market instances in history, including the 1973-74, 1987, 2000-2002, and 2007-2009 plunges. With some minor imputation (estimating bullish and bearish sentiment as a function of the extent and volatility of prior market movement), we can verify that these syndromes also emerged just prior to the 1929-1932 collapse. (see above link)

Wisdom tells me that you would be wise to heed John Hussman's advice. 

Readying to Sell

At this point, I would be happy to return to profitable position and sell all my positions, excepting gold. If central banks are buying gold or in the case of Germany, moving gold to their bank, I am very curious about what they know that I don't. I am not in a gold buying mood right now, especially after a year of declining gold prices. But if I saw gold in an uptrend, I could be convinced to buy more.  

For now, I will move my stop-sell closer to the daily closing price and hope that my positions continue to climb higher. 

(note: the above article is for entertainment purposes only and not to be used as financial advice.)