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TMFPostOfTheDay (< 20)

A Stealth Bear Market



October 31, 2013 – Comments (0)

Board: Macro Economics

Author: whafa

My favorite company, Kimberly Clark, is breaking out of some consolidation it's been going through since April / May:

You have definitely bought Kimberly Clark products in your life. You probably buy one or more every week (for which, as a shareholder, I thank you). It's hard to imagine a TA guy looking at this chart and not concluding that it's very bullish.

But I'm not posting this to toot my own horn. Over the past few years, I decided to get serious about my stock purchases (as opposed to rank speculation on price). During that time, I've bought stocks that I never intend to sell, to serve as a foundation for possibly more risky growth stocks in the future. KMB was one of the first, along with JNJ, but also INTC, GLW, STX and a handful of others. Stalwarts that pay dividends and make products everybody uses in good times and bad. Stocks where I can fall asleep for 10 years and not worry about them.

I've had it in my head for a few weeks now to post something here about the "Stealth Bear Market" my portfolio has suffered this year. I have not enjoyed the giddy gains that people in growth stocks have been enjoying. TSLA, UA, GOOG, NFLX, I have stayed away from these (and more!) because I wanted to first build a solid base before I got on with growth stories. My stocks have generally drifted lower all year while the indexes have climbed to new highs.

But I can't post about a stealth bear market anymore. All of these guys were up solidly yesterday. KMB is up over 10% in about 11 days, and look at STX in the last month. With a beta that high, STX shouldn't be too surprising, but KMB? And JNJ is up 6.5% since Oct 9. These stocks aren't supposed to do that.

Am I cherry picking data? Absolutely. But from my miniscule vantage point, people are diving into safe stocks lately. The theme all year has been growth stocks driving the indexes with ho-hum performance from safe stocks. I can't help but notice a shift recently.

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