Friday, December 31, 2010

New Year's Eve Investor Sentiment and Market Thoughts

Well, it's been a crazy New Year's Eve here. Bowl games. Beer. Polar bear plunge into the pool. Yikes! Nothing like a party with your buddies to remember the important things in life. (And that's drinking beer with your buddies).

The pool was 47 degrees for the jump. FWIW.

I'm over the legal limit to drive, but that doesn't mean I can't blog. And I'm on the iPad, so thank you to the folks at Zaggmate who have made this beautiful keyboard case for me to pound my thoughts. Into. How's my command of the English language so far?

Let me be honest. I thought a bunch this week about selling my positions and going neutral or reducing my beta. But there are so many folks warning us about how extreme the bullish sentiment is and how there will be a correction after this weekend that I had to take a pause. That's my gut feeling, too. But that's the crowd thinking. It is difficult to go against that. But I think I will. For now.

Basically, there is no reason to sell your winners while the trend is in your favor. There will be obvious signs of distribution with price and volume that it will be a no brainer to sell. When the time is right. But is that now?

I don't think so. I'm letting it ride until I see more distribution and technical reasons to sell. I'm ignoring all these warnings about how extreme the bullish sentiment is. If there were no warnings about bullish extremes, I'd be more worried.

I will post a 2010 recap and a 2011 prediction this weekend.

But for now, I'd like to thank God for a wonderful two years of market returns. It's been amazing. I hope you banked some coin. No reason to dance in the end zone as we have another year ahead of us. The game is non-stop.

Cheers. Be safe.

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