Bear thoughts from a Bull. Anyone who knows me personally knows that I am a half full glass kind of guy. I am usually bullish on at least some segment of the market. However, lately when I pull my head out of the clouds, and take a real assesment of the current economic conditions, ...I don't like what I am seeing:
1) A market near the top, especially the Naz ...the money is already IN.
2) Record, ...I say RECORD, energy prices.
"Crude for September delivery rose as much as 57 cents, or 0.9 percent, to $61.95 a barrel on the New York Mercantile Exchange, where it was up 41 cents at 11:11 a.m. London time. Prices have almost doubled from the end of 2003."
I don't have to tell the smart folks on this board that this WILL affect everything from personal income consumption, to the cost of newly manufactured products.
3) Our 'conservative'(?) administration in Washington is spending the US into deep, deep debt, with no relief in sight.
4) The housinng and credit bubble will be accounted for at some point in the future.
5) The chinese and India cheap labor markets are killing us in the trade balances, and the US job market. The Chineese, and others, could put a hurt on the US by selling our US treasuries aggresively if they wanted.
6) A terrorist activity could kill the markets with an instant downdraft that could take months, or even years to recover from if it is serious enough. I don't have to remind anyone that this can, and has, happened not too long ago.
Somebody tell please this old Bull that I am just full of the Bull munure, so I can sleep like a bear in hibernation.
That said, I am looking for a strategy 'just in case'. One thought is a good short canidate that can be accessed in an instant. My thought is the a Biotech index fund, as Bios take a beating on general bad news. I reads in the past that there was a large biotech index fund that could be shorted on the way down, ...I need to read up on that subject and look at the possibilities.
I am also thinking defense companies specializing in anti-terrorist products, and junior 'domestic' energy companies with relatively large Oil and NG reserves, will be a handy safe harbor, not to mention that both sectors are doing well in the bull climate also. Win-win??
I am wide open to any comments here. I'm sure that I am not the only one here that wants to protect their capital, and recent gains. I am thinking it might be wise to have a contengency plan in place that could be acted upon in an instant. This board has the heads that could put something together, ....EP your thoughts?
Comments...anyone please.
... greeneyedhawk
