Bear Bubble

If your selling stocks here and now:

1) You have a margin call.
2) You have illiquid investments that are doing poorly (real estate, hedge funds and private equity) and you sell what you can....i.e. stocks.
3) You think the upcoming elections will hurt America.
4) You think the next derivative shoe will fall like CDO's, interest rate swaps and credit insurance products.
5) You think lower interest rates by the fed will do nothing for the economy.
6) You think we have peak earnings for corporate America and they are going much lower.
7) You believe that short term cash and bonds yielding 2 to 3% are a better deal.
8) Your concerned inflation is going much higher.
9) Peak oil is upon us and the end of the world as we know it is happening now.
10) You're a trader.

Some recent thoughts/ expressions we have heard:

1) "If your explaining your losing."
2) The weakest companies when stress tested are the first to fall (unsurprisingly). AXP, C, MER, T, BSC.....
3) "Play your game".
4) In Business, Supply what is missing.
5) Know what you own.
6) Roosevelt, "Had witnessed this low threshold for discomfort in some of his closest friends, and he believed that it showed a shallowness of character that he was determined never to see in his own children."
7) Wilderness law, "Only those fit to live are those who do not fear to die."
8) Psychologically, everyone is over the edge emotionally. The world is one big bubble.
9) Worst start to the new year....since 1982 (start of the greatest bull market ever) since 1904 (market was up 40% that year).

We like to know what we own, that supplies without competition what is missing, play our game long term, be with the strongest companies, not spend a lot of time explaining what we are doing, we believe stocks are attractively priced and we are using this market to upgrade our portfolios as others are selling.

We clearly are at extremes right now...sentiment, bonds verses stock valuations, international verses domestic valuations, and volatility...maybe we see this one month every five years??

We did sell all our Gold yesterday....when talk show hosts say you have to be in gold then we sell...now they are all saying get out of stocks.

China did turn off several major power plants yesterday because of a lack of coal availability, coal took a big jump up in price....the Chinese are balking at a 50% increase in iron ore prices...offering a 30% increase....BHP is in the cat bird seat.

Danny Boy seen here is hibernating a bit as we enter the coldest couple of weeks of winter.