Sector Model
|
XLB
|
3.28%
|
|
Large Portfolio
|
Date
|
Return
|
Days
|
BBRY
|
7/16/2012
|
92.55%
|
321
|
CAJ
|
9/25/2012
|
-0.35%
|
250
|
BOKF
|
2/4/2013
|
16.81%
|
118
|
SWM
|
2/12/2013
|
34.51%
|
110
|
MWW
|
4/11/2013
|
23.44%
|
52
|
ABX
|
4/11/2013
|
-12.73%
|
52
|
TPX
|
4/22/2013
|
-8.11%
|
41
|
TTM
|
5/6/2013
|
3.00%
|
27
|
DLB
|
5/13/2013
|
2.01%
|
20
|
GMCR
|
5/24/2013
|
0.27%
|
9
|
S&P
|
Annualized
|
10.07%
|
|
Sector Model
|
Annualized
|
25.10%
|
|
Large Portfolio
|
Annualized
|
32.64%
|
It’s been a month now since there was a legitimate rotation
on the model. I cheated for a couple of
weeks, rotating where I could, but the industries are remaining in lock-step
with each other.
Most folks think of the market as either a bull or a
bear. Some would add “sideways” as a
type of market. But there is another
kind: bubble.
Bubbles are weird.
They don’t have to make any sense, and if they made sense they wouldn’t
be a bubble.
In a bubble either a sector or industry will just keep going
in one direction.
But there is no sector or industry to this bubble.
This bubble is the entire market.
Has it popped?
It’s a bubble: you can’t tell when it’s popped until it’s
too late.
In any case, there isn’t any meaningful rotation going on
yet. No doubt in a sudden reversal I’ll
get another case of 52 card pickup like I did back in September:
That was right at a top, by the way.
And no, you can’t use that for market timing. It’s one thing to say, “at tops I usually get
some heavy rotation”, but quite a different thing to say, “at heavy rotation I
usually see a top.” The first statement
can be true and the second completely false.
My sector model is still mildly bullish, but weakening.
I’ve seen some sophisticated analysis out there arguing for
an imminent collapse. My models aren’t
sensitive enough for that kind of thing.
The worst part for me is that my stocks move BEFORE the market, so even
if I could anticipate market moves before the market actually moved, it would
STILL be too late for me.
So, it doesn’t really do me much good to even try.
When it hits, it will hit.
Until then, bubbles.
My three year old has a little bath toy that sings a song
about a “bubble farm.”
Of course he doesn’t get the words exactly right and he
sings about the “bubble fart.”
Maybe he’s on to something…
Tim
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