- We are headed into a very seasonally strong period. In seasonally strong periods extended markets often become more extended. A lesson I have learned the hard way numerous times.
- The backdrop of corporations aggressively repurchasing shares remains.
- The S&P 500 trades at 13.5 times expected earnings for 2012, which is reasonable.
Given the market backdrop I am very comfortable with my positioning. I am finding some very attractive stocks that have been discarded as investors chase beta. I believe these should outperform my hedges over time regardless of market direction.