Saturday, September 27, 2008

The End Of The Road

That's it, guys and girls. We are officially sliding into a Great Depression II. Yes, there will be some kind of a deal next week. No matter who says what, there will be a deal, just to keep US banking system more or less alive. But it's too little, too late. Credit is not running anymore, economy's blood stream is clogged.

Republican party deserves Hoover Prize. I propose small silver apple cart.

What to do? I don't know. I'm definitely selling into rallies next week. I'm keeping Phillip Morris International (PM), keeping and increasing at dips Altria (MO), keeping UUP: dollar is going up, depression = deflation. In case I'm wrong and we're getting big inflation instead, it's loss worth taking. Just gimme inflation, I'll take it. Positions to close: Red Hat (RHT), probably Ebay (EBAY). Positions to reduce: everything else. My goal: increase cash position to at least 40%, better yet 50%, by the end of the year. Raytheon (RTN) is still on my radar, but I think the best time to buy would be after election. Obama's victory is almost ensured by last economic events, and these elections will be about economy. Common misconception is that he is going to decrease military expenses, but he wouldn't have such luxury. So there should be a dip in November.

I hope for a deal over weekend and some rallies next week. If no deal, I will sell some anyway, there is no sense in holding a lot of equity.

Full disclosure: at the time of publication author had long positions in MO, PM, RHT, EBAY and UUP and no positions in other stocks mentioned. Positions can change any time.

Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.

1 comment:

Muddling Investor said...

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