Here’s an excerpt:
"Yesterday morning, I warned clients to use any lift to sell equities. CNBC reported on the call in the afternoon, and many readers have asked for a more detailed explanation.
Last week the market became so oversold that a corrective bounce was due. We saw that move begin in Monday’s rally. But don’t get too excited yet: I expect this bounce to last a week or so — two at most — before the markets start heading south again in a selloff that I expect to last until early summer, and bring the Dow down to the 8,800 to 9,000 level.
As such, I have been advising clients to use any lift as an opportunity to exit most of their long positions. In particular, I have been exhorting managers to sell cyclical, rate-sensitive and high-beta holdings.
I have aggressively sold equities, and I am now about 50% cash. I expect to be in even more cash by next week . . ."
Repositioning Before the Selloff
3/29/2005 2:15 PM EST