I apologize for being not-that-great-a-host today. Between family visitors and my imagined belief that Disqus was having trouble, on top of trying to manage a rather large portfolio, my attentions were severely diverted away from blog-land.
The market took another tumble today, and although I'm delighted to have another nice day of profits, I am disappointed that my gains (in percentage terms) fell short of the inverse of the S&P's loss. The S&P was down 1.68% today, whereas I was up about 1.21%. That isn't the kind of performance I'd like to see from my carefully-chosen selections.
The reason for this somewhat watered-down performance isn't because my picks aren't good, but instead because yesterday I scaled back my risk, and thus I wasn't fully invested. As an experiment, I loaded the spreadsheet of my portfolio from yesterday morning, and those gains knocked the socks off the market, because that portfolio was 140% invested.
Of course, I wouldn't be bellyaching like this if the market had pushed higher today, because my losses would have been subdued compared to the market's strength………..and in that event, I would have been patting myself on the back for reducing my exposure.
The frustration stems from the impetus to scale back, since it is partially driven by the end of the quarter. And by "end of the quarter", I do not mean the window-dressing that people are worried about by money managers, but instead my desire to retain a strong, profitable quarter for my own clients, and thus a fear about being too exposed in these final days. That isn't a technical analysis-based rationale, and since I'd like to exercise Spock-like rationality on a consistent basis, I am scolding myself for letting such impure thoughts even enter my head.
On a "bottoms-up" basis, I am still quite bearish, although I can't help but keep looking over my shoulder for some rally out of God-knows-where. We are in a gorgeous waterfall decline………….slow, steady, and tasty…..and the longer it goes, the better. As I mentioned earlier today, we got well into the "green tint" I had illustrated last night, and I think this tumble is ultimately going to take us to 925. As for when, I'm not sure. Next month? Maybe. As late as October? Perhaps.
I will close by saying that since "G-Day" (the day that our government announced its lawsuit against Goldman Sachs), the market has felt normal again. Maybe our good friends on Broad Street turned off their market manipulation machines out of fear. Who knows. But, through all the wiggles and waggles, both up and down, the market has been acting like my dance partner again, and I've stopped stepping on her toes.