I have been reading gloomy, if not downright frightening, economic news for almost two years. Last December I threw in the towel and sold everything. And when I say everything I mean everything. The mutual funds, kid’s college funds, retirement, brokerage all went to cash or on bets that the market was finally going to collapse.
The market collapsed at the end of December. The S&P dropped 9% in a matter of weeks. The Nasdaq 100, where most of my investments were, dropped 16%. I looked like and felt like a hero and a genius. The time had finally come, the economic collapse I had been preparing for was finally here.
Since then the Nasdaq 100 has risen 23%. And I have had absolutely ZERO participation in that rise.
I still believe that there will be a financial reckoning that makes 2008 look like a warm up. The past few weeks, coupled by the insanity of the election have started to rattle some nerves while I hope that my short investments finally pay off.
As with all the writing on this blog, I could be wrong.
In school we learned that the stock market is “efficient” and will work itself out. That may or not be true because the stock market of today is not the stock market of yore. There is so many fingers in the pot, be it HFTs, ETFs, regulations, algorithms and computer driven trading that I feel the market is no longer efficient. A read of Flash Boys by Michael Lewis might keep you awake at night.
Long the US dollar. Long gold. Short QQQ.
Am I wrong? Are the many very experienced money managers and hedge fund managers wrong? You better hope so.