Call Me an Opportunist
June 22, 2011Last year I shorted the Dow Jones Industrial Average when it was at 10,860. I took a bath. The Dow continued to rise, and I closed out my position in March at 12,300. Who are the fools investing in equities at this juncture in American history? Whoever they are, they certainly got the better of me.
I’m on the verge of going back in. After faltering for a few weeks, the Dow is up to around 12,100. At the start of its precipitous decline back in 2008, it hovered around 11,000. At its bottom it hit 6500. Economic indicators don’t warrant its rebound. Stimulus spending goosed the economy and drove the Dow. But the stimulus will end, and like an addict out of dope, the economy will tremble, and so will the market. I sense the market’s jitteriness already, the waning of its high. Our thirty-one year spree of low taxes and big budgets is almost over. The ascetic fiscal plan proposed by Jerry Brown in California is going to be the model for national debt reduction. And when the government raises taxes and reduces spending, the stock market will suffer. Badly. I see it returning to 6500. Call me an opportunist. I aim to cash in.
