I'm no Kenny Rogers

You need to know when to "hold 'em" and when to "fold 'em". Having grown up into adulthood as a "buy and hold" investor, I've struggled with folding even when I senses that I should as I have always seen the market rebound and my net worth with it. I've done better this cycle as I have  sold shares, kept money on the sidelines, and sold some shares short. But, alas, I still have a large long portfolio. I don't know when to fold'em.

If it was easy I'd be very rich, but I'm not because it isn't.  

S&P earnings for 2009 are now forecasted at $40 and the S&P is currently at 925-that's 23 X earnings. P/E's at that level are not cheap, no matter ho much they have fallen. Yet that market seems to want to go higher and it probably will. For awhile.

I did through in the cards on NCC/PNC. I took my losses in my taxable accounts prior to yearend for tax purposes and jettisoned the IRA position this morning. I'll replace it with SPY as I'm not a good gambler and don't want to miss a bear market rally. Several other falling knives that have lacerated me have behaved nicely prior to today. TSO and TRN have made nice comebacks and, while still losses, worthy of waiting awhile longer.

Since the Fed has declared war on old people by driving short rates to zero, I've moved money from treasuries to FDIC insured money market accounts. There are crappy banks, still open, paying 3.25-4% APR and GMACbank.com will give you 3.75% for 12 months. I'll take these yields until inflation arrives late in '09 or early '10. There are much better yields available in corporates and municipals, but you have principal risk and i've got enough of that in equities. So that's where some cash is ending up.

One bright spot is Bunge. It's up a bunch since I bought it several weeks ago and acts strong each day. Earnings are still projected for $8 in 2009 and it now sells for $56, or 7X P/E. It's a good company, but who knows how soybean shortages and Brazilian fertlizer pricing will play out. I hope they do. If they can produce $8 there is more to run and market action seems to indicate that others feel this way also.

I will continue to sell covered calls when my current ones expire later this month as the market isn't going to blast off even if it rallies some more from this level.

Time to play gin with the wife and show her how smart I am at cards.