Sitting On My Hands

I am currently at my lowest level of stock market exposure since 2006. On a big day I would not expect my portfolio to move much more than 0.30%. Valuations seem in the realm of fair in regards to the vast majority of individual stocks that I look at. Market participants are too bullish for me to want to trade the market from the long side  but not excessively bullish enough for me to want to go short. I am seeing fewer opportunities and as a result am doing less.

When I began investing one of the biggest mistakes I would make was to always want to be involved. A well thought out investment would work out for me. At that point I would be itching to find another investment and often gave back my gains. It was not until I broke that pattern that I was able to make money more consistently. This is one of those times where I don't want to force anything and would rather wait for better opportunities.



W at Off-Road Finance said...

With a big enough pool of strategies I think it's possible to find something worthwhile to do nearly all the time.  But I do agree that valuations do not scream long or short right now.  The trend says long.  My net beta is 18% of portfolio right now, so I'm vaguely on that trend.

Tsachy Mishal said...

I am finding a few situations but not enough. In recent years even when the market was overvalued I was able to find discarded stocks. But these days most of the cheaper stocks tend to be cyclical and I prefer less cyclical stocks.