History paints a bleak picture
June 01, 2010
– Comments (4)
While I am not personally a big believer in technical analysis or reading the charts, I came across a very interesting article this morning that compares the charts of major bear markets in the past to what we're going through today. It's worth a look if you have a few seconds: History paints a bleak picture.
Of course at the end of the piece, the author talks his own book by recommending that people write covered call options on the stocks in their portfolio. I actually don't mind people who talk their own books. One should believe in their investment philosophy enough to talk about it openly (as long as they're being honest).
I'm not really an options guy myself, but I do agree to a certain extent that I have absolutely no idea where the markets are headed in the short run. I try not to be too optimistic nor too pessimistic. Very few people are able to consistently and accurately time the market, so I am net long but am trying to play things conservatively by purchasing stocks that pay me dividends to wait out any sort of prolonged downturn. As an added bonus, I've been trying to find specific "special" situations with catalysts aka free embedded call options that are likely outperform the general market rather than companies that drift at the whim of the general economy. In my CAPS portfolio I have been sprinkling in select shorts for additional downside protection.
Deej
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