After being bombarded all year long with political ads, I am pretty sure that most Americans are quite happy to put the presidential election behind them. The incumbent won and I guess we can look forward to more business as usual.
I did not strongly support either candidate, so I abstained from voting and just cast ballots on the numerous local initiatives presented to the local voters here in Miami-Dade county.
I believe that Obama’s reelection removes a lot of uncertainties, both good and bad, from the markets. We can now turn our attention to the technical indicators of the market.
Don’t get me wrong, I am a fundamentalist at heart and enjoy buying quality companies whenever they are selling for a discount, but I have come to regard the technical side of the market as a single entity that follows patterns that repeat themselves over and over much like winter comes after fall.
The bottom line: When the market is weak, all stocks tend to become weak and this presents the astute investor with opportunities. The pattern that I have noticed lately is that the Nasdaq Composite has been lagging the New York Stock Exchange Euronext (NYX) pretty badly.
This is usually not a good sign and it might signal the beginning of a new bear market in equities. I have been positioned defensively for the last two months with an aim toward avoiding some significant losses.
At this very moment, we are watching the markets very closely with the intention of buying on any extreme weakness in prices. However, it’s very possible that this is just the first leg of the correction. I will keep any purchases on a very tight leash.
Certain information contained in this presentation is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity. The manager believes that such statements, information and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions.