Wednesday, April 14, 2010

The Broken Record of Omaha

I haven't written lately because nothing has changed. I continue to fear for the future, but am enjoying the increased value of my equities. My cash assets continue to under-earn, but provide an Ambien effect at nights.

I haven't followed through on any short, or put, positions except AMR. Valmont and a few other serious candidates have risen steadily since I considered betting against them. Once again, either procrastination or fear saved me some money. I keep my negative list nearby incase my gonads grow.

Given the stock market's current pricing, the economic negatives far outweigh the potential positives. Last summer the negatives were out manuvered by the economic rebound. But after a 75 percent run, reflecting the improved economy, the negatives remain and there can't be much left that is sustainable.

The market goes up, but on relatively light volume. Conviction, or mania, is lacking. That means there are lots of investors that know they should be selling, but are enjoying the present ride up. At the first sign of trouble the exits are going to get congested. We could see a large decrease in valuation. But when? And how much further will the averages rise before the descent? I don't have the foggiest on the timing.

Markets like to inflict the maximum pain on the maximum amount of people, so with light volume we probably aren't really close yet. I just deleted my guesstimate for the downturn as I really have no conviction in my ability to predict macro economic timetables. I'm the Crusty Credut Analyst, not the Crusty Forecaster.

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