New Column up at Real Money (03/03/06)

RealmoneyMy latest Real Money column, "Enjoy the Rally but Cull the Herd" is posted (sub only). It is based on this weeks admonition to Get Darwinian on Your Portfolio!   

I also speak to several technicians and portfolio managers, discussing what they are culling.   

Here’s an excerpt:

Despite the negative economic future, with all these positives and the indices near new highs, why have any concerns beyond the near term?

The answer lies between the long and short term. Over the intermediate term, there are numerous technical warning signs. I use these signals to help alert me to a possible change in trend or character of the markets. Investors ignore these signals at their own peril.

That all said, investors want to participate in this current action, especially since they know that the last leg up in a bull market is often the most profitable. Recall that from October 1999 to March 2000, the Nasdaq doubled. But there is good reason to be concerned too.

Short-term bullish, longer-term bearish, intermediate-term confused. What’s an investor to do?

Cull the herd.

The most amusing thing about this is the reaction it generates. The Bulls are convinced I’ve joined them, the perma bears think I’m a sellout. Anyone who’s been reading me long enough knows this is the same old sameold I’ve been yakking about for a year. I just keep edging the top date forward until I get the red market signal that its time to short.


Enjoy the Rally but Cull the Herd
3/3/2006 3:08 PM EST

What's been said:

Discussions found on the web:
  1. pete Preissle commented on Mar 5


    Concerning: “…the last leg up in a bull market is often the most profitable.”

    For a secular bull, as was the ’99-’00 run, perhaps.

    But for a cyclical bull within a secular bear as we have now?

  2. JCF commented on Mar 5

    Thanks for the update, Barry. Back when “Cult of the Bear” and the Desmond interview were getting such attention, with their Look Out Below! mindset, would have helped to have this caveat about the last leg up in a bull market. Is equivocation starting to set in? Is the “last leg” looking like it might extend beyond H1? We all know that bit about foolish consistency being a hobgoblin.

  3. JCF commented on Mar 5

    On rereading my comment above, I want to rescind my third sentence. (Or you may delete both these posts altogether, if you choose.) I definitely misused in haste the word “equivocation,” which I realize now is wholly uncalled for and does not convey the thought I was aiming toward. I meant something more like “ambiguity” or uncertainty in viewpoint, to which you already allude re intermediate term. My sincere apologies.

  4. Barry Ritholtz commented on Mar 6

    Life is far more nuanced than can fit on a bumper sticker (all evidence from Fox News aside).

    Its complex, and merely declaring onself a Bull or a Bear does not truly offer much light on the situation . . .

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