Market des Spazzes

Short and sweet:

The market was up today in the AM, then started leaking in the afternoon – suddenly, the market launched higher. I found out later that buyers were responding to news that European central banks will take some “coordinated” action soon. I say later because the market went up so fast it took me a few minutes to figure out what’s happening.

I have been watching intra-day action more closely over the past few months just to see what happens on the micro scale. It is amazing what happens from minute to minute each day. It also goes to show something I’ve been noticing the past few days. The market was itching to go higher and when it started to move, hundreds of computer-driven trading programs must’ve signaled buy.

Why Greece Matters

There is also the impending Greek election. Amazing that a country with the population of Massachusetts and Connecticut (and many times the debt of those states) can have so much influence. But it’s precisely because our world and our governments by extension, have become so debt dependent that much debt is issued and as a result, much debt is owned. For those of you that don’t know, the reason for the bailouts in Europe is that national and seminational banks of other European countries own Greek debt. A Greek default sinks these banks and as we Americans know very well, no politician is going to get a bank fail – God forbid. And therefore we will have socialists doing exactly what they despise (as liberals did here in the US) – bail out rich people and their bank stock holdings and print money which props up stocks, real estate, and precious metals – all things that wealthy people own.

It’s all too comical.

Going Forward

I will keep my theme of focusing on income, owning some gold, and having a trader’s attitude toward stocks, especially risky ones. Recently, I added a REIT to my income clients’ portfolio. I may even add it for everyone. I like the properties, the cash flow and the dividend. It fits right into my income theme. However, I currently have a high cash position as the risks seem to big for me to enter this market wholesale. Sniping opportunities seems better. I am also considering a recent preferred share offering that pays a 6% dividend. I will take a little more time to decide on that. Furthermore, I am trying small growth trades – it’s important at higher risk times to keep positions smaller as strong opinions with wild markets can be costly.

Stay focused out there – and remember, risk management!

At the time of this writing, I or my clients own the following securities mentioned in this column: Gold