Market is ripping all time highs, so I’m selling a good chunk of an equity fund. Up 35% inside of 3 years. Sell high my brothers.
Now the next question, what do I invest in now? I’m thinking this will be the play dough for my new ride.
Think a lot of growth/momentum names that worked out in 2013 will continue to get whacked this year. A number of growth funds’ 1Q14 investor letters have talked about the need to de-risk after a terrible March. If they are going to take profits, you should consider doing so as well.
Yeah so what makes a good investment now ? At this point I would go for defensive blue chips.
I’m with numi. My view is this is going to be a rough summer (now to Sept) for stocks. I recently read somewhere that the proportion of people in stocks who are trading nothing but chart patterns and other nonsense is at an all-time high – this is one of the factors that drove the rally last year. People are taking profits now and I think it will continue. Many stocks are technically broken. There is no upward catalyst. I think selling will continue.
Trying to put money to work on the long side today is hard. This is probably the toughest market I have ever been in (going back 8 years). Very little to do on the long side, lots to do on the short side but the market is so retarded right now, it’s easy to get on the wrong side of a stock that is clearly worth zero but goes up anyway. We are net short and focused on exposing companies worth nothing to capture the same day rerating. We’re up for the year and beating the market but this is looking like a really tough year for most sane investors IMO.
TBH, I hope we have an epic collapse and all the tards lose money. I will make money if the market tanks and then we can all get back to some sense of normalcy and sanity where fraud stocks go down (preferrably to zero) and quality longs get bid up over time – the way the market is supposed to work.
As a side note, if you have a multi-year time horizon, I don’t see how you can lose money being short the R2K growth index right now.
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I recently rolled over a 401k, which required going to cash. It is self directed. I intend to have it in 100% equities, but I have only invested in once company, a targeted 10% position. I have a few names on my watchlist, but can’t bring myself to pull the trigger right now.
Basically I think there will be more opportunities to buy lower this year, and I won’t be missing out on a rally if I buy now. Too many headwinds, and a lot of fed uncertainty.
Good thinking. By paying cash, you’re “earning” the interest you’d otherwise be paying. And I’m not truly convinced of that there’s anything that will pay the 7% (or whatever) rate that cars are going for these days.
Downside - you don’t have the use of your cash for other things that pop up, or in case the market presents a “buying opportunity” in the next few years.
I just checked my credit union’s website:
“as low as”, with good credit, obviously:
36 Months 1.99% APR 60 Months 2.24% APR 72 Months
2.49% APR
I’m conflicted with taking gains myself, for the reason mentioned before, what do I invest in?
On top of that, I have a good amount of cash coming in after my expenses, from my day job that is just parked in a bank, earning nothing. Maybe the best thing to do would be to just stop investing any futher and let the cash build up for now.
Greenspan and Bernanke both lowered rates when stock markets tanked. I doubt Yellen would be any different.
If you have clearly overvalued stocks (that Bromion is shorting :)) then sell them now. Or if you need cash, sell now. Otherwise, grin and hold.
Let me repeat. If you don’t know what you will do with the cash after you sell, do not sell.
If you invested during the “irrational exuberance” period, you would have said the same. It lasted 4 more years. Understanding market psychology is just as important as doing fundamental analysis. Market can continue not to make sense for another decade. 10 years is nothing, a blip on the chart in a stock market’s history.
We can make money on the short side today. I would actually rather be 100% short right now but our fund docs don’t allow us to do that. The long side is disturbing. It already feels like 1999 – just look at Plug Power, which is objectively worth nothing and yet at one point had a $1.5 BILLION market cap because lots of investors misunderstood a contract they got from WMT and the CEO went on TV and lied about an outlook for profitability this year. It’s nuts. I’m not going to try to argue with the market though, we just expose frauds and they blow up and we’ll make money no matter what the market does. In a 2009 environment we’ll be long net-nets, today it’s short frauds. 2009 was much easier though (and more fun).
hey bro, do you work for a short fund or just happens that youre currently short?
also what % of funds are short mostly? it sounds more interesting to me to expose frauds and make money that way than look for undervalued companies
There are only two short only funds left in the country. I know one of them well, the other one is Jim Chanos’ fund which I don’t know. My fund is long / short.
More money is made on the long side but you have to go where the opportunities are. Shorting is always harder but sometimes you get fat pitches (like today) and a good PM will make money on both sides while maintaining low net exposure.
that sounds like a great gig. very interesting dynamics.
Never heard this before, but I like it.