Michael On Everything Else

US Markets

The US markets continue to confound me, but the old adage “if you can’t beat ‘em, join ‘em” applies here. I’m cautiously long.

From Yahoo!:

U.S. stocks ended higher on Thursday, with the S&P 500 at a record after a flurry of positive economic data, as investors hoped for signs from an annual meeting of central bankers that interest-rate hikes are not imminent.

The S&P 500 broke two records during Thursday's session, climbing past its previous intraday all-time high of 1,991.39 and ending above its previous record close of 1,987.98. Both had been set on July 24. Investors are anticipating that the benchmark index will touch the 2,000 level, which it has yet to breach.

Compare that to this, from ZeroHedge (yes, it’s a quote of his quote):

"[There is] the resigned capitulation to the trend, going fully invested in order to survive, with low-risk paying nothing and 'low risk' being almost certain doom. Perhaps the most tangible example of principal-agent dynamics I have seen during my 30-plus years in this business."

So I’m part of the herd. For two years now my portfolio has been focused solely on energy and primarily natural gas and it’s done very well. This week I skimmed some profits and checked all my trailing stops to make sure I’m in a safe position.

Like gardening, good portfolio management practices consist of processes to "weed and prune." If weeds are not pulled and plants go unpruned, eventually the bounty will rot on the vines, and the weeds will choke the plants out of existence.

Standard caveat: Don’t be a douche. I’m not giving you financial advice so don’t sue me if your potfolio tanks.