About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Wednesday, June 30, 2010

Stock Market -- Going Long

Since I have not made a big mistake in a long time, I am entitled to
one. So, I am entering long stock market orders with a six month
time horizon and should complete by the end of this week. In my
view, the market is pricing in a cyclical downturn of earnings to
commence before the end of 2010. My indicators do not show that
and it will likely be a number of months before they would. I have
no argument with a slowdown or a back up of business inventories
for a few months. But, I think the economic recovery will persist.
The market is developing a deep oversold in the short run, and
with $80 of annual earning power in the cards for the SP 500
this year, stocks are reasonably priced currently. If the market
weakens further or churns about over the remainder of the
summer, I will write against my longs, book some income, and
lower my break evens. I will also do some very short term trades,
both long and short in equities and fixed income as well.

Since this is not a blog about my portfolio, I plan to return to
the more universal type of comment in upcoming posts.


Anonymous said...


Rich said...

Comparing XOM, at a 10x PE and 3.10% yield - as a generic stock example-, to the 10 year treasury at 2.98 %, and it is rarely more clear that stock v. bond prices are out of whack.