Blah Blah Blah – Friend or Foe
Maybe it was too little sleep, maybe it’s my time of the month, but for whatever reason I feel like a grumpy old man today. Perhaps that’s why rather than celebrate the surreal rise of Australian and North American indices I am becoming fearful.
When I look at this chart of the S&P ASX20 as a proxy for the Australian market, rather than seeing a friend swinging me ever higher I see a viper poised to strike. I look at companies in my portfolio and ponder what to sell. Then a strange think happens. While I was happy to trim my holding over the last few weeks I’m suddenly feeling greedy. I feel like if I was to sell I could be missing out on the next bull market. What do you see? How do you feel?
I look at Macquarie, a company I bought on the very simple premise of it being a strong survivor and I wonder how high investors are willing to push it. I have no idea how to even get comfortable valuing Macquarie, it’s up over 100% since I bought in and almost 80% since their SPP. I know I should take the money and run, yet greed is telling me I can make even more.
At times like this I almost forget the investment plan I wrote earlier this year. Greed tries to make me forget my plan because the plan says sell into strength, sell to those who were fearful when I was greedy and are now greedy when I should be fearful. I see a viper ready to strike and so will continue to trim my equity exposure. I hope I’m wrong and the markets continue to power ever higher, but as always I’m focused on ensuring I happy no matter what occurs.
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I was surprised to find a sale note for Mac in my inbox this morning. I placed a sell on half our position, which for those keeping score is 30% of our recent total as I sold 40% a week or two back. Here it is, three weeks ago, how times flies, http://www.fusioninvesting.com/2009/07/ahead-of-the-buffett-curve/
I was surprised as I placed a limit order just above the bid yesterday, after I published this post. The share price proceeded to fall away and I checked occasionally through the day, but it was always lower than my limit, except it seems for fifteen minutes late in the day.
With some heavy selling on US markets on Friday, I’m glad to have a little more in the bank.The amazing thing about the sell-off was the attribution to a weak consumer. Like doh! Surely no-one seriously thought the US consumer was gonna come to the rescue. Yeah they’ll keep buying stuff and there’s some pent up demand, but without their housebooks the party is not going to continue. As some smart guy once said, the markets don’t reflect the news, the news reflects the markets.
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