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Taking some off the table



September 19, 2007 – Comments (0)

Folks, we have our irrational exuberance. I've been selling plenty of stocks lately, basically anything that is trading for what I consider fair value. Here's the catch: I only sell the ones for which I'm confident I can compute a decent fair value. As such, even expensive-looking growers are still in. When I can't figure out how much excess success a company with room to run has left in it, I keep it. More predictable cash-flow beasts, if trading at my FV estimate, are getting cut loose.

Ben's rate cut won't save housing, and it won't stop a slowdown. I don't think we get a calamity, either, but no one will know why. (Maybe it's that rock I keep in my pocket. It keeps away tigers, too.)

As I survey the market, I see a ton of terrible, speculative invesments, companies that are terrible capital burners, continuing to run up. Sooner or later, these will all get what's coming to them. My current guess is sooner, at least sooner than the Sheeple on the Street seem to think.


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