Is it time to pull out?

I don’t think this may not be the case, but when I look at fundamental things like profit margins I still can’t help but here “it’s the new normal” and get nervous

http://charlessizemore.tumblr.com/post/111239897191/global-stock-values-where-to-park-your-cash-for

When Mr. Templeton wrote that, i think he was thinking more than a mere 5 or 6 years. We’re between pessimism and skepticism. I am leaning towards the lower end of the grow on skepticism.

As a US based investor, I wonder if now isn’t the time to sell, but have personally been pondering if a covered call strategy is now appropriate. SP500 is now at 2100. Selling a 1 year call 5% out of the money (2200) has a 3.2% premium. Dividend yield is 1.8% That would be putting an upward limit of 10% return on the portfolio (5% strike price + 3.2% call premium + 1.8% dividend).

Its a better time to do this today then it was 3 years ago.

Here we go again - http://www.bloomberg.com/news/videos/2015-03-16/republicans-lack-will-on-deficit-fight-stockman-says

Here we go again - http://www.bloomberg.com/news/videos/2015-03-16/republicans-lack-will-on-deficit-fight-stockman-says

Interesting read: http://www.valuewalk.com/2015/03/de-risking-should-include-valuation-risk-gmo/

valuation risk v long term trends

with all due respect to bill gross. No such thing as new normal. Heres a ray dalio quote:

““The same things happen over and over again in history. The problem that I’ve learned about that is we are very much biased by our own experiences,” Dalio said. “So what I learned over the years… that everything that surprised me and cost me money were things that hadn’t happened in my lifetime before, but I learned that they happened in other peoples’ lifetimes.” –Ray Dalio

Read this quote and all i could think of was man i wish i could tape everything he says. then i realize he does that already.

^^ Really interesting read, thanks rawraw.

You have some historical examples of negative corporate yields?

Interesting perspective but we all know that history never repeats itself inthe same fashion. You could argue that 2007-2008 was similair in scale to the great depression yet the cause and post-reaction was entirely different.

^thats a mark twain quote.

Negative rates have happened before for treasury bonds for us right after world war 2. not sure about corporate bonds though. but im sure it has happened. in essense a negative rate is one party charging the other party for the privlelege to store their money. i’m pretty sure this has happened numerous times in history with most of it being undocumented.

I really like GMO. Honestly the reason I like LendingClub so much is it is a way for me to get returns that aren’t awful until some of these other assets become more reasonable. LendingClub isn’t risk free, but I don’t expect credit risk (which can be somewhat influenced by valuation risk if it resulted in actual activity, like the CRE bubble) to be anywhere near the valuation risk we may be facing in the current markets. Time will tell if it was a good strategy or not, but LC yields are slowly coming down which is what I’ve expected all along. It’s harder and harder for me to maintain my double digit returns with acceptable credit risk, so it may not be a safe haven for much longer.

Small caps move higher as the Russell 2000 Small Cap Index sets new all-time high.

Flows into small caps because they have less exposure to the dollar than large caps.

^ Over generalisation.

I am loving my overweight allocation to US small caps right now.

S&P 500 = 46% foreign revenue S&P 400 = 23% S&P 600 = 16%

Decreased US equity exposure by 10% on 3/30 (sitting in cash). Anybody else trimming?

Decreased my high yield exposure, sold all my energy high yield bonds yesterday, thankfully no net loss. Maintaining some equity exposure still.