Wednesday, October 5, 2011


As I wrote so crackpottedly in the last few posts, I believed this situation was never 2008 but rather 1998.  I am backing up this weakly held opinion with some money as I will finally lower my cash level from 100%.  Because I'm such a reckless badass, I will be buying enough XLP (consumer staples) to represent 2% of my portfolio.  I know, I'm so bold. 

If my 1998 analog holds up, this could be a pretty good rally.  However, we are still in a secular bear so this is still not a buy and hold late 80s-00 market.

Here are some further thoughts about why I think we could rally and possibly make new highs:

-DJTI (Trannies) are finally showing signs of life.

-A lot of bad news has already been priced in, showing greater signs of upside risk rather than downside risk.

-Third year President rally + seasonality should prove stronger than the Euro clusterfuck.

-Cause Stone Cold said so.

Also a mea culpa about the price of oil.  It didn't spike higher and away and beyond as I thought it would.  Luckily, I lost nothing except a bit of ego and like Ben Bernanke's printing press, I can always make more.  As Peter Brandt says: an opinion is not a position and a position is not an opinion.

A few thoughts about the Occupy Wall St movement: I saw a link to their supposed list of demands.  Martin Luther these people are not.  I am reminded of the old saying, an enemy of an enemy is my friend.  This is what's happening here.  If the movement gains enough steam to actually get down to details, we will see a lot of division.  However, their coming together to hate the top 1% is well-founded.  Ironically, government regulation is not the answer as it was the government that allowed the top 1% to get disgustingly wealthy in the first place.  But I'm no Austrian.  I just want Geithner, Paulson, Bernanke and Summers to come out and just say they don't know what the fuck is going on and can't predict wind in a hurricane.