Wednesday, May 04, 2011

Sell Everything!

I'll bet you don't know ANYONE who's moving their 401k to 100% cash these days. Some might be worried but their *action-plan* probably amounts to nothing more than crossed fingers.

And I'll bet you don't know ANYONE who bought gold under $400 an ounce ten years and 1,100 points ago either.

If only I had held the 4,000 ounces I bought, and vowed to never sell, at $270 or so!

If only I had held the cotton, sugar, coffee, and cocoa I invested in 4 years ago...

See - I Am Now Officially A Commodity Investor.

Getting back to stocks...

It is indeed hard to short the averages in the spring and summertime. I feel like whenever it's a warm and sunny day out in the Northeast the market just ratchets higher. Seriously. And I've never heard anyone else point this out.

Will the market blow off even higher, castrating the scant few bears left? Who really knows? - and that's a disclaimer I hear every bear promulgate these days. People are scared $hitless to short these days and why the bleep wouldn't they be after a 2 year downtick-less, reason-defying levitation? Heck in the old days, bears would short without fear and with only the disclaimer that if it goes higher....they'll gladly sell more!

I bought some more puts on Wells Fargo last week - January 22.5s for 1.90 or so. The stock is 29.50 today.

My puts? Well they don't expire until January of 2013!

The banks were bailed out not just by direct government handouts, but also by a surging stock market (after all, they are *skimmers* too), 4% mortgage rates, FHA absorbing all their new mortgages, a now since ceased re-fi boom, and the government-sanctioned license to lie about their balance sheets.

Now all that is done and much of it is unlikely to recur going forward save for the direct government handouts.

The stock, bond, and housing market bailouts were engineered to benefit the 'old coots'.

All of us young people are still screwed but dumping our investments here is at least one act of financial self-defense we can take. Stockpiling canned goods and ammo is probably not a bad idea either!


Anonymous said...

Try as they might the Fed is not going to resuscitate the housing market.
And those banks (BAC, Wells, et al) are going to be walking dead for years to come too. Too big to fail, to effed'd up to succeed.

But the fed sure can make a mess of something else (oil, food, commodities, precious metals, ...).
Inflation is here; they wanted it and we've got it. Just don't know how bad it will get ...

CaptiousNut said...

On some levels it's really the *local* statists that are doing their best to kill housing.

Property tax rates keep soaring because, well, that's all pols know how to do - raise taxes. No one wants to fight the unions and their pensions. Heck probably most of the pols have a spouse or relatives collecting something sweet. These friggin' 'old coots'!

A lot of people (debt-free homeowners) in the Northeast who are fed up with escalating property taxes are going to be soon putting their homes to market.