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Normally I'd say no. Use whatever guide you develop but this rhyme wouldn't be my choice. This year it just may be true. Yikes, when we gonna get a breather? Little over 2 years ago and Dow was sitting around 6500 with some calling for the end of the world. Now, busting over 12,800? I took a little off the table yesterday as prone to do and maybe some more next week if she keeps shooting up. Can always put it back to work on the the way down unless ya think everythings going to the moon.
Things that don't add up. (1) Dollar tanking, (2) Unemployment near 10%, (3) Gas over $4.00, (4) Divided govt/rancor in DC (5) middle class bein squeezed out of existence, (6) inflation up (7) states going bust pension systems on the rocks (9) Japan on the rocks (10) Nuc power in doubt, (*) Wars goin on all over the Middle East. Just don't understand the euphoria in the stock market. Well theres my rant. Sell in May may be the right call this time around.
I hear your concerns. Personally I prefer to let take profit when possible and let cash position build while waiting for buying opportunities. For now all new $$ goes to stable value.
Stole this excerpt from bee's James Grant interview. Might explain why all the markets are rockin. Grant suggests its because ya cant make a plug nickel in cash.
JIM GRANT: "Nothing is going to be good. So think how hard it is to hold back a cash reserve in this time, when cash yields nothing, it yields a negative because the inflation we all see is something more than zero, right? Cash yields zero. That’s hard. It’s doubly hard because your stupid neighbor who doesn’t watch this program is making a lot of money in the stock market. How hard is that not to participate... you can’t not do it."
I listened to James Grant interview on my iPod 2 weeks ago. You can listen to them fresh via free iTunes subscription to Wealthrack podcast or video podcast.
Anyway, what made me think that if there was time if James Grant was ever happy with the policy. It seems like these newsletter salespeople always have something to fear for.
Hi Sven: As for usefulness to fund investors I'd agree with your take on Grant and Cramer. For style and depth of thought, would take exception. Only limited experience with both, mainly through TV, but have found I sleep quite well when Grant speaks, but Cramer keeps me awake while providing precious little in return. Grant, thru his "Interest Rate Observer" seemed more popular in the the 80s & 90s than today. Maybe because there wasnt so much competition from tv back than. His methodical delivery appears dull on television. (Sometimes appears on PBS Nightly Business). Focuses on larger trends extending years or decades out. Would bet most followers of Cramer are looking to make money in a few months, not years/decades down the road. Grant warned of excessive leverage and saw the crisis/crash of '07/ '08 coming. But was many years ahead of the actual happening. For that matter, so did lota others including some at the FA forum see it coming. Linked Wikipedia articles on both and unfortunately the coverage there is quite lopsided in Cramers favor, as I believe over the years Grant has been more influential at least on big money managers.
Comments
Things that don't add up. (1) Dollar tanking, (2) Unemployment near 10%,
(3) Gas over $4.00, (4) Divided govt/rancor in DC (5) middle class bein squeezed out of existence, (6) inflation up (7) states going bust
JIM GRANT: "Nothing is going to be good. So think how hard it is to hold back a cash reserve in this time, when cash yields nothing, it yields a negative because the inflation we all see is something more than zero, right? Cash yields zero. That’s hard. It’s doubly hard because your stupid neighbor who doesn’t watch this program is making a lot of money in the stock market. How hard is that not to participate... you can’t not do it."
Anyway, what made me think that if there was time if James Grant was ever happy with the policy. It seems like these newsletter salespeople always have something to fear for.
http://en.wikipedia.org/wiki/Jim_Cramer
http://en.wikipedia.org/wiki/James_Grant_(finance)