|
From: R. A. Christy
Editor/Publisher, ‘The Long and Short of
It’
President/CEO, Christy Investment Group
http://www.christyinvestments.com
Date: March 23, 2008
The Indicators:
|
NYSE Bullish Percent |
Os
@ 32% |
|
OTC Bullish Percent |
Os
@ 28% |
|
Optionable Bullish Percent |
Os
@ 30% |
Our Position: DEFENSE
The adage that March is supposed to come in like a lion
and go out like a lamb is supposed to be about the weather. In weather
terms, the month of March has been nothing short of a natural disaster.
The indicators are giving us readings that almost defy
belief. This is Wall Street not the Bermuda Triangle.
Oil is up then down, the supply is in question but the
demand is not. Gold at $1,000 is a buy or is it? The dollar is toast,
or is it?
I am sure about one thing – I don’t know what’s going to
happen next. Let’s go with what we know:
-
We are in a pretty rough stretch
-
Consumers have less to spend
-
The Fed is making money easy to get
-
Banks are scared to lend it out
-
Econ 102 tells us that spending and credit drives the
economy.
-
If spending and credit slows, the economy slows.
-
If the economy slows enough, a recession is the
result.
-
If a recession is the result then stocks and property
values will fall.
This is basic deductive logic.
But wait, this is March 2008 and all bets are off because
our indicators are not confirming this. It’s this Bermuda Triangle thing
again.
Are people buying and holding stocks as a hedge against
more inflation? Where does the dollar figure into all of this?
My thinking is this – the market will hold its own and
inflation will erode the real value of your stock and property values.
(Note: Real Value = Current Value – Annual Inflation Rate) I saw
somewhere this past week that inflation has trimmed 25-30% of real value
off our stock portfolios over the past ten years.
If the US isn’t the place to invest, then where should we
be putting our money? In the old days, as we went – so went the world.
When Wall Street sneezed, the world came down with a cold. I don’t think
this is true anymore especially if you spend some time looking at growth
rates of emerging markets. Japan has me especially intrigued.
(Intelligent Trader subscribers should be on the look out for a new
recommendation early in the week)
In the meantime, I’m still playing this thing pretty
close to the vest. I’m looking at these areas pretty closely: (1) as
soon as the charts turn north again, I’m buying more gold; (2) I’m
putting more into forex and will use longer term trades using pairs that
do not involve the dollar and (3) I’m going to find several ways of
investing in India. Look for that next week.
Until next time,
Robert Christy
The Intelligent
Trader
P.S. Please fee
free to forward this to your peers, friends and associates you think
would benefit from its contents. They will thank you for it - and so
will I!
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Robert Christy is a professional stock
trader, money manager and author. Mr. Christy is the President CEO of
Christy Investment Group, Ltd., a registered investment advisory firm.
He is also the Managing Partner and Portfolio Manager of Plato Advisors,
LLC. At the time of publication, Mr. Christy may from time to time write
about stocks in which he, Christy Investment Group Ltd or Plato Advisors
LLC has a position. In such cases, appropriate disclosure is made.
Under no circumstances does the information in this column represent a
specific recommendation to buy or sell stocks. Mr. Christy appreciates
your feedback and invites you to send it to
rac@christyinvestments.com.
The Intelligent Trader
c/o Christy Investment Group
P.O. Box 625
Alpharetta, GA 30009-0625
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