Its that time again - Shorting

[eagle488]

Well, Im thinking that even the defensive stocks might get hit too. There is a key difference between now and 2000.

During 2000, there were some sleepy stocks that had underperformed the market and were not involved in the irrational exuberance. Witness Kelloggs

http://finance.google.com/finance?q=K

Today, everyone is swooping into Kelloggs as if it were the last bastion of hope. Its trading at record highs and P/Es. Stocks like Colgate, PG, Kelloggs, etc. are not value plays when compared to other years. They have been piled into way too much.

If the stocks do get hit, then the stocks you listed probably wont fall as hard as the less defensive plays. However, lets look at Pepsi:

http://finance.google.com/finance?q=pep&hl=en

Pay close attention to May 2002 on this rough chart. 30% drop.

Defensive stocks are not immune to drops.

So with all that said. I believe that a healthy position in cash would be appropriate going into the new year.

If you dont like to short stocks and are purely a long player, I suggest taking off in January for a long well deserved vacation. Come back during the summer when the rubble has settled.

 

[makloda]

Quote from eagle488:
So with all that said. I believe that a healthy position in cash would be appropriate going into the new year.

So you start a smarta** thread, preach on how your great picks made you $600k in four months, blow a boatload of hot air about all kinds of different fundamentals on how now these momo stocks are going to break down... and then all you do is go to cash?

 

[eagle488]

Of course.

I can see the tides turning and its not going to be pretty. Im just not certain if I am right. My money is not an unlimited supply so I dont like to be wrong.

I am confident that the overall market is not going to suddenly have another 10-20% spike, so we can rule that out.

However, it may go sideways or slightly up versus down.

While I dont usually short stocks, I think that time is going to come fairly soon. I will await a confirmation on my charts as I do not fade.

My reasoning is quite strong for a change in strategy.

http://www.rgemonitor.com/blog/roubini/

The defensive stocks that were good plays in 2000 are no longer good plays. All of the stocks have been bid up to unreasonable highs like I stated previously.

Ive actually lived through some of these downturns in our nations history. So I would like my cash please to stuff into the mattress as I await the final outcome.

On a side note, 600k is not a lot of cash when compared to some of the people who are around me and on elitetrader. I just read about some guy that bought a million shares of grow at 6 dollars and now its at 60. In comparison, I am a simple man that lives in the suburbs.

During the summer, I saw the actual batmobile cruising down Route 208 in New Jersey right near Franklin Lakes. Not a replica, this one was one of the actual ones used in the old series. Now that is real cash. So I dont drive the batmobile and I didnt get in with GROW at a million shares at 6 dollars. Maybe I might have enough money to scrape together one day to buy an actual yacht or god forbid the Dodge Charger from the Dukes of Hazard.

I know that 600k may seem like a lot to you. When I traveled around Asia 3 times in the last year, I too realized that there are many people out there that are very poor.

Stick with it and one day you will get there too...600k or poor in asia.

Quote from makloda:

So you start a smarta** thread, preach on how your great picks made you $600k in four months, blow a boatload of hot air about all kinds of different fundamentals on how now these momo stocks are going to break down... and then all you do is go to cash?

 

[arkadyka]

Quote from eagle488:

Well, Im thinking that even the defensive stocks might get hit too. There is a key difference between now and 2000.

During 2000, there were some sleepy stocks that had underperformed the market and were not involved in the irrational exuberance. Witness Kelloggs

http://finance.google.com/finance?q=K

Today, everyone is swooping into Kelloggs as if it were the last bastion of hope. Its trading at record highs and P/Es. Stocks like Colgate, PG, Kelloggs, etc. are not value plays when compared to other years. They have been piled into way too much.

If the stocks do get hit, then the stocks you listed probably wont fall as hard as the less defensive plays. However, lets look at Pepsi:

http://finance.google.com/finance?q=pep&hl=en

Pay close attention to May 2002 on this rough chart. 30% drop.

Defensive stocks are not immune to drops.

So with all that said. I believe that a healthy position in cash would be appropriate going into the new year.

If you dont like to short stocks and are purely a long player, I suggest taking off in January for a long well deserved vacation. Come back during the summer when the rubble has settled.

oh, yes absolutely, a correction will sweep up everything - but there are plenty of people who either go long or go cash. for those people i would not just pick any staple, some are definitely better than others - i didnt really scrutinize over pepsi....although cvs is definitely attractive. even now.

 

[ACM Trader]

Just read some of Roubini's articles. For those who have not read them, I can summarize them by using one of Rubini's tittles:

"Beware of spin doctors".

That's pretty much what I think of his articles. They are articulated, as are the ones from the perma-bulls. He is right ?
We will know after the facts. For now, I continue enjoying that ride, up that is. When it goes down, it will be time to change the course.

 

[makloda]

Quote from eagle488:
I know that 600k may seem like a lot to you. [...]
Stick with it and one day you will get there too...600k or poor in asia.

How many account statements and blotters did you post again?

You're embarassing yourself.

 

[noddyboy]

Leave him alone. $600k is not a big sum to prove or disprove, and he needs his privacy in a public forum. I have seen traders lose a lot more or less in one day.

Quote from makloda:

How many account statements and blotters did you post again?

You're embarassing yourself.

 

[makloda]

Quote from noddyboy:
Leave him alone. $600k is not a big sum to prove or disprove, and he needs his privacy in a public forum. I have seen traders lose a lot more or less in one day.

What you have seen or have not seen does not matter much.

I will leave eagle alone as soon as he lays off the incredibly arrogant preaching and patting his own shoulder.

 

[eagle488]

You can comment all you want buddy. In fact, I think your very purpose for being on this message board is to flame people and get everyone in an uproar.

These are old message board tricks. You wouldnt act like this around someone in real life.

Someone who acts one way on a message board and then acts differently in real life is really a coward. While I dont know your real name or what you look like, I can say with confidence that your favorite color is yellow.

Where is your guts, where is your balls. Meet me in NYC in real life and then lets see how gutsy you are.

Coward. . .

Quote from makloda:

What you have seen or have not seen does not matter much.

I will leave eagle alone as soon as he lays off the incredibly arrogant preaching and patting his own shoulder.

 

[aspenboy]

Quote from stock_trad3r:

Um who says it has to stop by newyears? The rally will continue for the next 4-7 years ending in a massive blowoff top. it isnt time to sell until PE ratios go back above 100

What cha smoking dude ??