Tuesday, April 23, 2013

European economy may be slowing

As the numbers pour in from Europe, it appears the continental economy is slowing. Germany, the big powerhouse when it comes to Europe is reporting numbers reflecting a slowing manufacturing sector. With the change in the value of the yen, the Japanese manufacturers may be stepping up to the plate and out competing the Germans in some areas.

The American market, as well as the Canadian one to a lesser extent, is again on a roll. If the Dow climbs enough, say breaks 15,000, I'm thinking of tucking my tail between my legs and running. One thing is certain, weak rallies like the present one, cannot continue forever. The market will come off its highs. It is just a question of when.

I'm not a market timer. Yet, when I see stocks that are down which in the recent past I would have been willing to pay more for, I see bargains. I'm not always right but I'm right often enough to keep my head well above water. There are some stocks in my portfolio that are pulling at me like the mythological sirens of ancient Greek literature. I use the word sirens carefully.

These stocks may be calling me up onto the financial shoals. If I do buy, for once in my life it will NOT be to hold for the long term, it will be to make a quick profit. I'd like to have as much cash in the bank by this fall as possible.

Unless the financial picture changes a lot in the coming weeks and months, I see a big personal sell-off in my retirement future. I also see two big stumbling blocks:

  • The idea of selling off one's equities stirs fears of missing out on a continuing bull run. The result is that one is left holding over-valued stocks when the market turns south suddenly.
  • Holding cash during a falling market is like refusing to buy on Boxing Day. It is hard not to get into to the buy-now spirit. The result is getting back into the market too early.

Still, I cannot believe that holding forever, as I tend to do, is the course to follow at all times.

Friday, April 19, 2013

It may be a bear, but the claws aren't out; Yet.

To hear some of the business commentators on television going on and on about the awful bear market devouring all the year's profits and then some, you'd think the financial world had come to an end.

Tonight I downloaded the numbers from one bank to my Excel spreadsheet and input the numbers from my other account at another bank. I'm still in the black, not by much, but my numbers aren't red. What makes me smile is that I have taken ten grand out in order to live and I am still in the black.

My gut tells me that this bull still has some energy left to burn but my gut has been wrong in the past. I'm going to hold on, see how the financial world looks next week, and I may even try to buy some stuff.

The Romans used to read the entrails of sacrificial animals. I listen to the company quarterly profit reports, to the inflation announcements, the unemployment numbers . . . . I think the Romans could tell the future just about as well as I do.

Remember, I'm the fellow who bought CET at $3.90 because it was a bargain, thought PWT was a great deal when it dipped below $11. (PWT closed under $9 today!) Oh well, my AUSE, REM, SLF, ZUT — all relatively new adds to my portfolio — are still up nicely. Something has to be doing well that my financial head is still so nicely above the rising water.

Have a good weekend.