Trading Places

Last Thursday when everyone was selling equity, buying Government bonds and buying the US dollar......all with market held orders...after the record setting moves we have seen....sure seemed like a crowded exhaustive type market action.....since then gold has screamed higher, the dollar has reversed and is for sale, the bond market too has reversed...and equities are on a rip upwards especially the most over sold companies. It reminds us of the 1983 movie classic when the traders were selling as fast as they could and Dan A. stood up and said, "I BUY."

A big banker said last week on the economic slow down... that this quarter will look like a "walk in the park" compared with what lies ahead. We agree. Are we starting to climb a wall of worry??

We have not had this type of volatility since the 1930's.... and as of last week the YTD performance at Thursday's low was all time record setting.

Business week talks about the Optics- how employees and others view their behavior, how many are not sleeping, pervasive sense of helplessness, a vacuum in government, asking if they are acting on rationality or emotion. The NY Times talks about people that have given up on the stock market... having lost all their money and have gone to cash with what is left not trusting the system anymore.

Advice from a famous money manager:
1) Be a buy-and-hold investor.
2) Don't use borrowed money.
3) Don't buy stocks of businesses that need continual access to the capital markets for survival.

Good advice!

Gold, oil, and China have been our bogey's...they have been showing good relative performance...

Danny Boy seen here in the last of the warm sunshine for many months to come...