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« ETF Update: Winners Choose and Respect Their System | Main | Weighing the Week Ahead: Focus on the Economy »

May 21, 2010



Thanks to everyone for the encouraging response to this article. It is often difficult to take some evening time for a piece like this, and it helps very much to know that some find it helpful.



Mike C -- I have written a lot about the factors in the models, so I do not have much to add there.

As to the main point, our ETF universe has three inverse funds, gold, and bonds. As of May 9th, Oscar had a fully defensive position -- long gold and long the three inverse funds, a dramatic shift from the week before.

Thanks for helping me to highlight this key point.


Mike C

Oscar believes in the long-term strength of the economy and the stock market. He has a lovable and irrepressible enthusiasm. When things go wrong, he steps back for a bit, but soon tries again. He expects to do better than others during good times. Oscar understands that this approach involves more risk. Oscar is opportunistic.

Just curious, does Oscar ever take any sort of defensive/hedging action or is Oscar fully invested in stocks at all times with the philosophy of fully riding out any potential drawdowns?

If Oscar does take defensive action, do you mind sharing exactly what metrics or indicators would cause Oscar to do so?

CFD Guru

Your call on the debt issues in Europe being overblown are on the money I think.

Their debt will be a non-issue once their GDP starts to pick up.

Bill Luby

Nicely done, Jeff.



Jack Damn

What if you're wrong?

Michelle B

Excellent critical thinking based on evidence, and not opinion. Kudos.


While I agree that in the short term market participants may be over-reacting. More likely this is an echo-panic as people are scared of 2008 redux.

I do believe that long term the situation in Europe could have more of an effect than you have opined. Its fairly simple and has nothing to do with what % of US business comes from the Eurozone. It all rests on the US consumers confidence. If the events they are witnessing in Europe and Asia cause them to retrench then a double dip is a probability.

Should that be the case 10,300 on the Dow will seem very expensive.


Always nice to read your analysis and predictions, Jeff, and much appreciated.
On a slightly different topic, and maybe it doesn't mean anything, but I noted a lot of comments today on other sites that could have been taken word for word from late March or April of last year.


Thank you very much. It's getting very difficult to find anything approaching a balanced approach to economic events. With Europe, all we here is negative. It can overwhelm and the fear builds. Combine that with hair trigger, electronic markets and down we go. Yet, it does seem that the rational investor is periodically given buying opportunities. Yet, we need to do better. We need markets that are less volatile and analysis that is more fact-based.




I love your stuff Jeff; you are one of the few critical thinkers in the financial blog-o-sphere and media.

I just make the assumption now, that most everyone else, with a handful of exceptions is just going for page hits and advertising revenue.

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