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From: Robert A. Christy
Editor/Publisher, ‘The Intelligent
Trader’
http://www.christyinvestments.com
http://www.intelligent-trader.com
Date: July 13, 2008
This weeks’ ‘Long and Short of It’.
First the Bullish Percent numbers:
BPNYSE
Os @ 26% Defense
BPOTC Os @
26% Defense
BPSP500 Os @
26% Defense
DEFENSE
We’re still on DEFENSE and it looks like
there is going to be a good deal more red before we make a bottom. Now
is not the time to see if you are any good at catching a falling knife.
Trying to anticipate a bottom is not a good strategy from a risk/return
perspective, but people will be people.
I used to have a couple of clients that
tried for years to buy the bottom. They drove me crazy because they were
always wrong. It took me a long time to understand that their egos and
self-images were tied to how well they called the bottom. Because of
their need to be right, their performance numbers were awful.
Investing in the stock market is not
about being right! It is about making money.
SECTORS
On the sector front, the average level
has dropped back to 24.74% and the only positive sectors are Drugs and
Computers. Field position is good here and this is where we are going to
concentrate our efforts in looking for new names to purchase. This
washout is turning into a real enema and the field position for most of
the sectors is going to be incredible when the market turns.
On the short side, things are pretty
dicey and shorting the wrong name in this market could turnout to be a
painful experience. The reason things are dicey is due to the people
saying things that spook the market. Greenspan continues his world tour
of rewriting his legacy and Bernanke is still trying to figure out
whether he’s more concerned about inflation or growth. Remember, it’s
not the fall that kills you – it’s the landing and this one looks to be
a hard one.
AT THE BOOKSTORE
I was at the bookstore the other day
looking over the investing tomes. You can get a pretty good feel where
we’re at in the investment cycle by looking at the books that are flying
off the shelves. The ‘Foreclosure for Dummies” books are sales leaders
followed closely by “Get out of Debt” books, and books on ETF investing
come in third.
So what does all this mean? It means that
we are nearing the end of the credit crisis and people think that cheap
real estate is an asset class worth pursuing over stocks.
INFLATION OR DEFLATION?
This has the feel of deflation not
inflation. The investment masses are always wrong and their belief that
a decimated asset class is worth investment dollars is amusing.
Think back just a couple of years – how
many books and infomercials did you see about flipping houses? That was
one of those signals from up above that just screamed – you ain’t seen
nuthin yet.
This week is not setting up very well.
The Feds took control of IndyMac and the death watch over Fannie Mae and
Freddie Mac continues. Also, Lehman is back under the microscope and
only time will tell if they survive.
THE BUCK DOESN’T STOP HERE
The dollar is a hair away from making an
all-time low against the Euro and that only suggests more trying times
ahead.
We have stops on all of our positions and
our risk is defined. The best seat for all of this is on the sidelines,
which, is where I am going to sit, and raise cash as our stops are hit.
This isn’t the end of the world. The indicators will tell us when it’s
time to send the Offense back out onto the field. Until then, we wait.
If you have any questions, comments, or
just plain need to be reassured, send me an email and I’ll do what I can
to help. I don’t make it a habit of talking with subscribers, but this
time is a little different. If you need help, don’t hesitate to get in
touch.
That’s about it for now.
Robert Christy
The Intelligent Trader
P.S. Despite the sub-prime sell-off, the
credit crunch, and high oil prices, The Intelligent Trader continued to
deliver outstanding profits for subscribers in 2008. In 2007, we
finished the year up better than 17% --that's more than 3 times better
than the S&P 500 up only 5%. It’s been tough going so far this year, but
at the halfway point, we’re positive and the market isn’t. I’m looking
forward to the second half of 2008 with even higher expectations-despite
the risks most investors will face in the months ahead. If you’re not
yet a subscriber to The Intelligent Trader, I think you should give us a
try because I’m sure that will help your bottom line.
P.S.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, author and speaker. 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 Crabapple
Capital Group, LLC and the editor/publisher of The Intelligent Trader, a
subscription based long/short trading service. At the time of
publication, Mr. Christy may from time to time write about stocks in
which he, Christy Investment Group Ltd, Crabapple Capital Group, LLC or
The Intelligent Trader 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.
Robert Christy
The Intelligent Trader
c/o Christy Investment Group
P.O. Box
625
Alpharetta,
GA 30009-0625
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