Quick poll: should we buy equities right now? (SPX 1350)

Yes: Obama will probably back off on this $1.6 trillion tax increase target. It seems like he listed a lot of things so he has room to negotiate. Fiscal cliff will probably be avoided somehow… or else all these clowns in Congress will be voted out. And if there’s one thing that we can rely on, it’s politicians valuing their own survival. Bernanke/future Bernanke will probably continue monetary accomodation policies.

No: Even if fiscal cliff is avoided, we will still have tax increases and/or spending cuts. Israel is bombing Gaza; if Middle East becomes unstable, gas prices will increase and hamper US consumer recovery. Four more years of divided politics will hamper growth. Fed has no more room for monetary accomodation, if something should happen in 2013.

Uncertainty: What’s going on with Europe? What about the Petraeus saga - when will mistress 3 be revealed??

I personally am looking to add to some positions, but will probably wait until the beginning of next year. Purely anecdotal evidence, but I’ve been hearing about a lot of wealthy folks accelerating some estate planning and selling stuff because of tax concerns. I think there will be some downward pressure for the next 2 months.

My portfolio is in an awkward situation. The stocks I own are undervalued…but over the last month they’ve gotten even more…undervalued.

I’m going with my thesis that there is no significant impact. I have about 25% cash right now, and if market tanks…I will go all in, just like David Petraeus.

I like SPY calls but the index still has room to go lower

Not yet.

I see this everyday at my job. The wealthy are extremely fearful about increases in cap gains tax, plus the much lower exemption level for the estate tax, and all they are receiving right now are daily phone calls from their accountants and attorneys telling to make their move before 12/31. Not sure how/if this will move the market, but it’s more than just anecdotal.

But everyone knows about this capital gains tax thing. Do you think the “smart money” has already front run the individual investors? Just like real estate companies bought up San Francisco apartments before Facebook people got their cash.

bought more AIG, JPM and TEVA today

I say not yet, but I picked up a few shares of CVX today. Probably could have waited for it to test 100, but for a long-term position I’m fine with today’s price.

Watch out Frankie. AIG just got Tilson’d.


Tilson bought AAPL? perhaps I should be worried…

His position according to that report is in calls which means it’s insignificant. The report does not distinguish months or strike it only provides the share equivelant (100 shares per call). Also, the report does not show short positions, so for all you know he can be short the stock and hedging with calls.

I think we may have lower to go based on expected future proftiability, which has occured in a world of higher than mean profit margins and excessive government deficits. I think a mean reversion is in order for a fair number of stocks. But I think some sectors will do fine, the ones that aren’t effected by these excessive valuations.