Is This a Bottom
Maybe for now, but this is not THE BOTTOM. We remain at 38 percent long stocks and 7 percent short bonds as this possible bounce unfolds. The first formidable upside resistance is about 15 to 16 percent above recent lows. If more confirmation is seen we will get more aggressive.
Keep in mind this is a Bear Market that has a long way to go, we still feel that there is a lot of crap that needs to be unwound and the bottom will not be seen for a couple of years and not until stocks and real estate go down to 40 or 50 percent of their highs.
The Third Quarter ended yesterday with our Marketocracy Tracking Portfolio up 15.2 percent for the quarter while the stock market was down about 9 percent. We provide these numbers because it allows you to see what your portfolio would look like if you follow all our recommendations. It appears to me from comments posted to the site that many of our users pick and chose our recommendations, long recommendations getting much more usage than short recommendations. That is understandable as most investors are not acquainted with shorting. I would say that at the least when we go short that it would make sense that you go to cash or T-bills.
When we started this site it was after I read the book “Create Your Own ETF Hedge Fund” by David H. Fry. Our original thought then was to provide incite and recommendations based around using ETF’s (we use a universe of about 60) long and short so that investors could manage their own money. In the real world that is probably impractical as it would become a full time job to do well. The SEC makes it virtually impossible for middle class investors to put their money into Long/Short Funds managed by professionals, probably because they know there are not many professional Long/Short Managers, just gunslingers who use a lot of leverage. So we are looking at ways around this problem and may have some ideas for you soon.
9:10 AM CDT