Market Outlook

With investors starting to get a little scared since the U.S. dollar run on Wednesday at 2:30pm EST, I suspect the selling pressure may continue for a little bit longer. Now, more than ever, is the time to conduct personal portfolio holdings, as many stocks have really reached max potential. If you are looking at a charts and hold stock XYZ at $20 and are waiting for it go to back to $80 like it was in 2007, that is NOT the best strategy. The market has 3 elements to it: 1) Sentiment 2) Valuation 3) Fundamentals. Currently, the market’s overly bullish sentiment and rich valuation is ahead of the fundamentals of our “jobless” economy. With that in mind, many short sellers have been blown out (including myself) shorting; however, they will try again and if they win, many will short aggressively, crushing this market an easy 8-10% and equities can tank.

Some food for thought:

1. I have a basket of portfolio holdings – some long-term, some dicerolls. I know the companies well enough to smack the CEO if I had to, so if they are reading, beware. I recommend listening to the conference calls of the stocks you own or go to Google Finance and keep up with the companies to ensure fundamentals are intact – and see what the analysts are saying. All of my buys are heavily researched, so I weigh the risk/reward then purchase.

2. Move into names of quality. The “sh*t” stocks have done enough – look for solid companies that investors have ignored that have strong global sales bases. Proctor and Gamble is a great one.

3. Stay diversified unless you know what you the game. I really don’t diversify but it is smart to if you want to reduce risk. The S&P has sector weights, so I will build the model this weekend and show.

4. Keep high cash levels and use that cash to cost average down into good companies.

Portfolio Holdings That I Currently Own:
BAC, F, PEP, Short QQQQ, TWM, UNG, Long AIG puts, Short FRO puts, ENTR, WY, HES, FIG, PG, TSYS, DRYS, ERTS, NSM, MU, SNV, FLR, HON

BAC, F, PEP, PG, WY I will hold forever – the rest are really just trades and can be sold instantly.