Friday, March 21, 2014

Update 3/21/14

I've been a little off on the markets lately. I have been bearish, and that served me well for the first couple months of the year. The last two weeks not so much.

I watched the buying pressure in FSLR build a few days ago and didn't take the trade. The third day it went up like $12/share. I have learned by experience to not let the missed trades get to me, but they do nag, the risk is that they affect future performance.

Banks finally see some buying the last two days. Citi is still a laggard, BUT....

The frothy speculating in the small caps like PLUG seems to be abating. I noticed yesterday that I was antsy to get outside and enjoy the nice weather here.  I wonder if the big freeze on the east coast caused more people to sit inside and amuse themselves by trading.....

My habit is to always examine how I am feeling about the markets and about traded. If I am feeling a certain way my bet is that others are feeling that way. How do I want to trade vs. what is the profitable thing to do....

The markets are near all time highs again. With the continued angst over a rise in interest rates. I cannot help but think what the macro effect is of a 30 year trend of declining interest rates and a migration of the worlds populace to using stock and bond markets as a way to save for retirement. This happening due to the relentless debasement of all world currencies. What is money? What will hold value? If people were to lose confidence in the bond markets and the stock markets what would be left?
That is the question in my mind as the prospect of rising interest rates looms. Or does it? Thirty-plus years of money creation and wealth accumulation by the top may enable an "extended period" of low interest rates. After all, where else would money go? Does starting a business cost as much as it did in years past? Businesses are more efficient, right?  This may explain private equity funds. It is cheaper to buy a business and fix it than to create a business.
And as money congregates with the rich they will seek rent, and thus put the money in safe bonds. This interest rates stay low until the poor have some money to bid up inflation. Or until the weather changes and makes food scarce. If you get my drift.....

Let's see what the day brings.

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