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May 20, 2009 – Comments (3)

DISCLAIMER:  Novice point of view ahead... 

I have spent the past week or so watching things unfold in the world of the stock market.  I have been equally amused and confused by the volatility in the market.  Last week, the "pull back" that seemed to occur looked like we might have reached a top or a plateau before moving in either direction.  This week, things have been equally volatile, but appear to be trading in a bit of a range bound fashion.

There have been no real catalysts to drive things one way or the other.  Yet, the market continues to hover around DOW at 8500.  Is this the market putting in a top?  Are the bears going to get their much desired correction?  Are the bulls going to regroup during this pause and then bust a move to another high? I don't honestly know.

I have seen that numbers continue to worsen in the economic reports that have been coming out.  We have all seen the blogs that the negative numbers have generated here on TMF.  I have started to mull over exit strategies in my real life portfolio and started to wonder if my experiment with FAZ/SKF is going to pay off.

Why have I been amused by this?  That which amuses me is how my real life portfolio has been out performing the market.  It amuses me, because I can't honestly determine why.

What confuses me about all of this?  The continued press upward despite all of the negative reports (unemployment, housing, financials, governments running out of money, etc.)  Everything seems to point towards the market flying upward on fumes...proving that if you strap on a big enough engine you can make anything fly...but bringing into question just how quickly and how dramatically that flying object will return to earth when the fumes run out and there is nothing there to drive the flight...

So what am I waiting for?  Aside from a break in the bad news, something of an indicator that the market is going to move in one direction or another. I know the holy grail of investing.  But really, two weeks of relatively sideways, albeit volatile, movement.  Is this a top?  Or is this a plateau waiting to be leapt from to newer heights?  I don't know, but I am certainly pleased with the way things are working out in my real world portfolio, and much of that amusement can be attributed to knowledge shared here on thanks to the rest of the fools out there...Fool on.

3 Comments – Post Your Own

#1) On May 20, 2009 at 10:53 PM, EnigmaDude (61.22) wrote:

Hey Mike - good post.  I have been making similar observations except that I am seeing some companies showing growth over 2008 - it's not all negative news.  You do have to be a bit selective in what you read though.

I have considered picking up some shares of SKF as a hedge in my RL portfolio but just can't convince myself that its a wise move.

And I value novice points of view just as much as "expert" views - lately even more so!

Best of luck to you!

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#2) On May 20, 2009 at 11:16 PM, mistermiranga (99.52) wrote:

If you have a couple of those high fliers in your RL then I can see why..:) I stole your CPSL pick tonight...and like your others.

I don't proclaim to know the fair value of the SPX right now but I do think that the recovery timeline is going to be longer than investors have patience for...even the Fed is acknowledging that we have deeper issues and I would think they have a vested interest in being optimistic ;).

At some point soon the novelty of investing your retirement in a "too big to fail" is going to get old...the lottery tickets usually have more appeal when trading in the single digits. Probably a foolish opinion though... GL


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#3) On May 21, 2009 at 12:24 AM, MikeBobulinski (< 20) wrote:

My pick list on TMF reflects my RL portfolio.  The start prices on the TMF picks are real close to where I bought into the various positions in my real life.  The only exceptions are AAPL and SNP.  Buy ins there were a bit lower than the TMF starts.  But my RL portfolio has changed as I get more educated and find things here on TMF.  Unfortunately, some of my picks like CPSL weren't ratable at the start prices I bought in in real life.

Regardless, my education here on TMF continues and I try to learn something new every day. 

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