At World’s End
I have been at a loss for good investment themes for 2010. I agree with many who believe that this year will test your stock picking ability. In 2009 you just needed courage and conviction to buy when the WSJ said the Dow was going to 5000 and the S&P was going to 500 (Front page in March 2009). The only theme that I have retained from 2009 is that there may be more TCK and TGB type companies in Canada, which are waiting to be discovered by Asian money. Beyond that, picking big dividend producing stocks in place of bonds or buying into foreign markets now, while the US dollar is enjoying its recent revival may seem like reasonable ideas. The problem is that the market doesn’t feel cheap anymore. Apple is not at $85, BAC is not at $4.00 and FCX is not at $17 and that is not even considering the 10 baggers like TCK. As in the Pirate movie, navigating in the cold waters of the north, I feel that I have lost my sense of direction with regard to the markets. The question about going over a waterfall is still up in the air, but that is only one scenario of many. Binve had a nice analysis of relative risk, but it eventually comes down to what you really believe in and how certain you are with your ability to get it right. Friday’s sell off before the long weekend suggested to me that many investors are sailing these cold waters and feel equally ambivalent about the markets. In this type of environment, can a sustained rise in the market continue? Politics and world event are unlikely to calm just so that the markets can continue to rise, but world’s end is closer than it was in March but only because the end is always in the future and March is in the past. So I have resigned myself to watch a Pirate movie at home and save my money for the day when down is up and true skies appear.