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Varchild2008 (85.20)

Important Lessons for Optimistic Rally Investors

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March 26, 2009 – Comments (4) | RELATED TICKERS: DPS , BAC , WHR

This rally STINKS!  Be a Pessimist!!!   Before you shut me out....

A)  I am nearly an All Star now!

B)  I may be a Newbie still in the market.... Just over 1 year of experience now... But, I have grown quite smart over surviving 2008.  Anyone that has survived 2008 deserves some Kudos here!

Ok.. Here's my advice to you as to why you MUST be a PESSIMIST!

I have in this rally already reversed ALL (that's right)  ALL of last year's losses and then some....

But now is not the time to jump up and down... Call your Girlfriend and Buddies over to celebrate with Beer, Wine, and NCAA Basketball games....No!!!

Now is not the time to contact your local dealership for what the price is of a new 2009 Corvette.
Now is not the time to shop the Housing Market for a Million Dollar Home with 16 bedrooms and 8 baths, Gold Rallings, indoor Olympic Sized Swimming Pool and Jacuzzi + Hot Tub.

Why?

Cause we can LOSE everything you are gaining in your portfolio how quick?

This quick.....   *blink*    done!  It's all gone!  Too bad!  So Sad!

Ya think 2008 was nasty?  Wait till you find out what happens in 2113!!! ooooh boy!

So.... Be a Pessmist..... Trust me....  Even if this is somehow, bizzarely, a rally into a bull market that lasts all the way to your Retirement with absolutely not a single hitch because everything is just perfect all of a sudden....  You MUST be a pessimist!

Here are rules to follow for all you PESSIMISTS out there:

1)  If you are as clueless as me about the Options Market....  Study it!  I plan to buy some books this weekend. 

Next week should be known as "PUTS WEEK."

2)  Start Amassing Cash on the sidelines...  Ya know something in your portfolio will eventually DIP down hard... and you want to have that CASH liquid and ready to scoop in some shares when it does.

3)   Eyeballing for new stock to add to your portfolio? In this case... I live by a simple rule.. Look for P/E of 8 or less unless the catalyst justifies a higher P/E.  But almost always I am eyeballing a P/E of 8.

Ya know what I was drooling like mad over this morning?  (RCL)!!!!  Check it out.  Not too late to get in when it's at less than P/E of 4 before the start of this trading day.

4)  The problem with these rallys is they absolutely SHOOT THE MOON.   When the true value of the future economy justifies DOW 9,000.... Often times the Rally will SHOOT THE MOON to DOW 10,000+ before finally crashing down closer to where it should be.


Design and build your plan of attack.... Yes. I know.. We are all just nothing more than "BUY and HOLD" Motely Fool-ites. 

That's fine... But it doesn't hurt to start hedging all of these gains when they have basically slammed into your Portfolio litterally overnight.

In less than 1 month.... Many people besides myself have basically earned so much cash that it would normally take 1 full year in a super Bull market to get.  And we did it in 3 weeks????  3 weeks???

Go ahead.. See the 3 ticker symbols?  I bought them reallly really cheap in price before they skyrocketed.

4 Comments – Post Your Own

#1) On March 26, 2009 at 4:37 PM, motleyanimal (89.59) wrote:

I can't agree with pessimism. It's not a pleasant way to live and can often be irrational.

I find it is better live as a skeptic, instinctively doubting and questioning the assertions of others and remaining suspect of generally accepted conclusions. The skeptic has an agreeable life, one that keeps the mind active and will serve you well in the markets. Report this comment
#2) On March 27, 2009 at 4:31 PM, Varchild2008 (85.20) wrote:

Skeptic.. pessimist... same thing.. bleh....

Just that when we have such a huge run up in short order.. People need to protect their gains.

Dow just dropped today by 150 points... Whose to say this was just profit taking versus a trend back down to 7000?  I mean anything is possible in this insane fragile market.

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#3) On March 28, 2009 at 2:48 PM, ralphmachio (24.66) wrote:

I'm optimistic.  Optimistic that pretty soon, the market will correct itself, and a realistic valuation will allow for some real growth, or maybe a whole new system, the likes of which we could only imagine.  Maybe a correction in the discrepency between the rich and the poor might make for a friendlier place to live.  Maybe a vast, vast downsizing of the government could occur, making them unable to legislate victimless crimes, and create an imperialistic hegemony.  Maybe the public will awaken to how misled they are, undereducated, and repressed.  Very optimistic indeed.  This could be a half decent place, and it won't take long, in my opinion.  you gotta break a few eggs... 

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#4) On March 28, 2009 at 4:40 PM, Varchild2008 (85.20) wrote:

The "Discrepency" issue is laughable.  People wanting a shorter width between rich and poor and actually calling for the Rich TO BE poor.

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