Friday, January 25, 2013

Déjà vu: Contrarian Investing

It feels like this happened before. It feels like this happened before.

Look out, folks...The market’s booming and it seems like the party will never end. Not even Apple’s 15% plunge could derail this gravy train.

But as we rocket ever closer to all-time highs, it’s important to pump the brakes and glance in the rear view mirror. 

When things seem too good to be true, it’s usually time to sell. And vice-versa.

It was just 17 months ago that I urged people to start buying stocks because sentiment had turned so negative. Since then, the S&P 500 has returned over 27%. 

Of course, trying to guess short-term market direction is a fool’s game. No one except Ms. Cleo can predict the future. But time and time again, having the guts to zig while everyone else zags pays off.

I’m not saying sell everything--this rally may have steam left--but it makes sense to trim back some of your high-flyers and reinvest the cash in more defensive, dividend-payers. 

Or for bolder, bearish investors, take that money and invest in TZA (Direxion Daily Small Cap Bear 3x Shares), a hyper-aggressive, leveraged ETF that can deliver big returns quickly if the market moves down.

Note: TZA should only be used in the short-term and with “play” money. 

Tuesday, January 22, 2013

NFL Reviewing Brady, but Bill's the Criminal

Instead of reviewing Tom Brady's slide in the AFC championship game this past Sunday--Tommy made a kicking motion as Ed Reed came in for the tackle--the NFL is overlooking the game's most egregious offense:  Bill Belichick's coaching performance.

Bill, who's brilliance typically buys the Pats a few points per game, put together one of his all-time worst performances.

For starters, Bill owns the most prolific offense in football, guided by the league's most consistent QB, yet decided to punt from the Baltimore 34, 35 and 42-yard line. He was playing scared.

On top of this, he acted like a baby and refused to talk to reporters after the game. Scared and childish...not qualities we look for in elite coaches.

Listen, there's no one I'd rather have coaching my football team, but Bill's performance in the past few BIG games has been embarrassing.

Monday, January 21, 2013

Obama's Call to Action

Now it’s time to finish what we started – let’s get going.

High-stepping into his second term, President Obama offers a challenge to America’s compatriots: come together and serve. 

Blaming our inept Congress for all life's ills has turned into a national pastime. But is Congress really what’s holding this country back? The president knows if we truly want change, it’s up to us to get it done.

And as Warren Buffett sagely pointed out on CBS’s Sunday Morning show, “What is right about America just totally dwarfs what’s wrong with Washington. 535 people are not going to mess up 315 million over time. I know it.”

That's not to say positive change comes easy, there's a reason Obama said “We, the people” five different times in his inaugural speech. Meeting our challenges will require the best of all us, 315 million people working together. 

This is our journey, our time. Let’s not waste it.

For those needing a nudge, is a great place to start.