Investing Wisely -- Update with Recommendations and Personalized Follow-Up

By: Steve Bauer | Sun, Jan 30, 2011
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Update & Recommendations:

In my previous Update, a couple of weeks ago, I suggested that the - September to date rally is exhausted, and you should either be in cash or on your way to cash. That remains the case today. Unfortunately, it has also been 'the case' for a number of weeks.

The past two weeks of trading have begun to look like a real stock market once again. For nearly eight weeks the stock market had "dinked" around more so than I can remember. Little or no money has been made, and that is because the "Breadth" of the marketplace has gone sideways or down. That means, that the "internal market" has consolidated but the Indices (Dow, S&P, etc.) do not reflect that situation. Both the NYA and Compaq (composite indexes) are guilty of deceiving the public investor - that has been going on for decades. (see below).

I continue to be a strong Bear and there are many confirming factors that tangible support this thinking / recommendation.

Gold has broken down but I have not pulled the plug because both Silver and Copper are holding on, for the time being. They all just might rally again so I have only sold select mining stocks from my Clients portfolios.

If you look at your mutual fund portfolio performance over the past month or so, on balance they too have also started to break down. That is because the "breadth" of the NYA is substantially off its tops (double tops of Mid October and Mid November). The COMPQ is now - triple topping from a highs coincident with the dates mentioned for the NYA.

The imminent General Market Bearish Inflection Point I have been forecasting has begun to take form and this past week was very much welcomed by me. I hope you have been following some of my other postings and understand that this will be a "second" General Market Bearish Inflection Point, and that is a very rare event.

I would like to point out that Inflection Points also occur for Sectors, Industry Groups, Companies and ETFs. For the General Market to experience an Inflection Point many Companies (components) must first start to break down. You might understand that mathematically until the components of something breaks down ( or turns up, for that matter ) there can be no change in the principle - in this case it is the General Market.

One reason for the success of my Inflection Points over these many years is that I patiently wait for the "principal" to break down and not try to get fancy by investing before that happens. Please let me know if I have confused you. If so I apologize and would like to help.

So, the market is continuing to set up for yet a second (actually third) attempt at a Pullback. My best forecast is: Over the next couple weeks or perhaps some what beyond, a General Market Bearish Inflection Point (a second one for me - remember the first one has not worked very well, but I believe it will) and my important "Conformations" should materialize. (Repeating) this situation (two Bearish Inflection Points in a row) normally does not occur all that often. That means the coincidence of yet another Bearish Inflection Point at what the technicians will call a "double / triple - top" will soon occur.

That too suggests that holding long positions in both securities, ETFs and mutual funds is not all that wise.

I hope you are following my - Personal / Private Blog. It is boring but accurate!



Something to Ponder:

It is very important that you do not assume that a General Market Bearish Inflection Point means that everything is heading south. This past sentence, is why I continue to publish and offer to help.

Selectivity of the securities you own is no longer just "Buying the General Market." It is the study and analytics of the Sectors and even then you must also closely look at the Sectors' - Industry Groups. Carrying this one step further, you must look then closely look at the individual Companies and ETFs within the Industry Groups to make prudent, wise and profitable investments.

In my day, this was not so. You could invest with confidence that your decisions were going to be profitable. This is definitely not so today. I hope you will always remember my "bell curve." Invest in Companies that are only at the beginning for long positions and at the end for short positions. I follow this advice and you should too - it Works every time!

You must be very "selective" in your choices of securities. Stock market analytics is not just a science - it has become also an art form.

I'm loving returning from retirement and finding the above words be a fact. I'll now admit it was easy in the old days, and I enjoyed much success. The daily challenge of using some very old tools and some rather new computer tools to make investment decisions is - fun for this old fox.

The good news for me is that my "stuff" is still profitable for over three years now and getting better.

Have a wonderful, profitable and healthy new year.


If you would like to have further information on my work / analytics or perhaps my professional asset management, mentoring or consulting - services ...

Just send me an Email, and I will respond promptly.


Thank you for your time in reading my "stuff" and continued interest in my work / analytics.

Smile, have Fun - "Investing Wisely",

 


 

Steve Bauer

Author: Steve Bauer

Steven H. Bauer, Ph.D.

Steve Bauer

Steve has several degrees, i.e. post graduate degrees and doctorate and a great deal of (too much) continued education. For seven years, he did a stent as a University Professor of Finance and Economics.

Dr. Bauer also writes for SeekingAlpha.com. His articles can be viewed at: http://seekingalpha.com/author/steven-bauer?source=search_general&s=steven-bauer

He owned a privately held asset management firm and managed individual investor and corporate accounts as a Registered Investment Advisor - for over 40 years.

Professionally he is a financial analyst and private asset manager / consultant / mentor.

Steve can be reached at senorstevedrmx@yahoo.com

Copyright © 2010-2013 Steven H. Bauer, Ph.D.

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