Nuclear Holocaust

The six month run in the market made market participants too complacent. We are seeing the same brave souls who were buying hand over fist just wanting the pain to stop. The excuse for the selling is rumors that a nuclear meltdown is imminent.

I believe buying into this panic is the right move and have put my money where my mouth is. However, because market participants were so bullish heading into this crisis its possible that the selling can last for longer that it normally would. That said, I believe that once it is over these buys will be rewarded. Have a good night.

6 comments:

nicasurfer said...

i believe shorting these skf and bgz, vxx vehicles is a good play right now also

Anonymous said...

nobody knows what's going on in japan for sure. it's all speculation at this point. any of you people nuclear experts? cramer seems to think he is

robo said...

I think the S&P is headed down to test the 200dma now, but it could take a few more weeks.

Anonymous said...

I'm a PhD physicist. The danger in terms of health and deaths is not that great. There will be thyroid cancers in 10-20 years in people with high exposure, but most of the radiation will remain local to the plant.

However, there is a real danger to the stock market in terms of panic. Electricity down, factories closed, banks unable to dispense cash, grocery store shelves bare, road and rail networks damaged - none of these induce confidence. A panic could easily develop.

revelo said...

I don't see much panic. Panic is what we had with muni bonds back in November to January. (that panic has subsided, but I expect it to return eventually, which is why I recently sold the munis I picked up in January. I'll buy them back during the next panic.)

Stocks are expensive. They were expensive a year ago when SP500 first topped 1200 and they have gotten more expensive since. Stocks look reasonable on a PE basis only because corporate profits as % of GDP continue to be near record highs. But profits as % of GDP is highly mean-reverting (BEA has 100 years of records to that effect). When profits mean revert, PE's will sky-rocket. Buying dips when the market is expensive is a dangerous game. Count me out.

Anonymous said...

Volatility is back!


Last year we had a correction of 10% from the end of April- beginning of June.

Almost everyday in May the market moved 2% or more, intraday.

Expect more moves of 2% HIGHER and LOWER, intraday, to continue threw March.

Volatility is back!