But it ain’t gonna do you no good. No matter how much you want the market to do something it is not going to do you any good.

I took today’s photo of the Cambridge US War Memorial. It’s a special place in the world you probably haven’t been. I’m sure there are larger and more impressive memorials, but this one will always be special to me as on the memorial wall we found the name for our son. No, not our actual son, just the name we decided to call our son. My son aside, the memorial is definitely on my top ten places to go in Cambridge.

The Orchard for scones and tea on a summers day also makes my top ten, as does a walk past the main colleges. A punt on the Cam is always good, if you want to do it yourself  make sure you watch how it is done before you give it a go.

Getting back on topic. If you’re wanting something to happen in a market and everything you’re looking at is telling you it should happen and it still ain’t happening then maybe, just maybe you need to look further and understand how and more importantly when others are seeing things happen. Are your time frames right?

Your charts tell you the market is overbought, the fundamentals tell you it is over bought and you never really believed in the rally anyway. So why doesn’t the market capitulate?

Ten Reasons why the market won’t capitulate

1. Trends go longer than most imagine. You know that, but for some reason you often choose to ignore it.
2. Earnings are good and going to get better in the year ahead. What do markets do when earnings are improving?
3. Companies are playing guide and beat better than ever before. Markets go up based on reality beating expectations.
4. Cash stinks.
5. Residential property stinks.
6. Commercial property still has Damocles’ Sword  hanging above it.
7. So where are you gonna go? Gold? While bubbles are de rigeur in markets, not every move has to result in a bubble, most don’t.
8. Because way too many people are waiting for it to capitulate. Yes, they’re not as vocal as they were, but they’re out there under invested and under performing.
9. Because not enough cash has been sucked in the market and too much is on the sidelines.
10. Because I want it to.

I wrote the above on 4 December and forgot about it until I read 10 REASONS THE EQUITY RALLY IS OVER at The Pragmatic Capitalist.  The 10 reasons belonged to David Rosenberg and TPC concluded with these bullish comments, “In other words, we remain in a “beat and raise” world.  That is unchanged for now and will ultimately be the reason why David’s 10 reasons are wrong and why the unwavering bear will be wrong again about this market top“.

My portfolios are positioned with the following thoughts in mind.

• The market will be lower at some point in the future, but that could be 12-24 months away.
• While markets are slightly overvalued the trend is my friend.
• I may be wrong so I want to positioned so I’m happy whether the market goes up or down. I achieve that by having cash available in the event of a decline, with a solid core of stocks like Telstra and Pfizer that have a chance at outperforming the market and a smattering of stocks that should thrash the market if global economies continue to improve.

Long term readers may have noted by basic philosophy. I buy stocks when markets are likely to be higher in a year or so and I sell stocks when markets are likely to lower in a year or so. I’m a tight-arse and like to buy things when they’re cheap, most of all I like to buy stocks when they are cheap and the overall market is cheap. As always, no matter what the market is doing I’m looking to exchange fairly/overvalued stocks with undervalued stocks which have better risk/reward profiles and catalysts to attract new buyers.

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