A Reappraisal of Market Conditions

In January and July I warned that this will be a difficult year.  It has been.  However, very slowly, day by day, my viewpoint is changing.  One of the all time classics is The Battle for Investment Survival by Gerald M. Loeb.  In it, he describes the time to buy stock:

"In the first place, the general background should be favorable, which means that popular sentiment should be bearish and the securities market well liquidated. Business conditions should be poor, or the general expectation should be that they will become poor."

Well, for weeks I have been hearing and reading that business conditions are bad and that they will get worse.  The Republican Party in particular is delightedly pointing out how bad things are.  The general public has been selling stocks all year and putting the money into bond funds.  Very high quality companies like Intel are selling at historically low prices on a price to earnings basis.

All this is telling me that as time goes by it is getting safer and safer to buy stocks.  If I were saving for retirement, this would be a time to dollar average.  Since this is an election year, we should be emotionally prepared for a lot of random volatility.

I am beginning to unwind my short positions (at a profit) and leaving the freed up cash uninvested for the moment.