Limit order for Mosaic and thoughts on the crazy mkt rally

I set up a limit order at 43 for Mosaic in my trading account. Right now I only hold Gold (a pretty big chunk actually) via the double long DGP ETF. I am severely cash strapped in my trading account because of which, at this point, I am unable to load up on things that I like. But then again the market is excessively over-priced (30-40x PE is really really bad given the economic data points that we have) at this point and so not being in the market right now may not be such a bad thing.

As the market gets cheaper (once the Fed dollar printing dries up) I would like to start building core positions in names I like and then trade around them. I think this is a style most suitable for my kind of investing and leaps and bounds better than a buy and hold strategy. Remember that whenever we (atleast my generation and those in their 45s) talk about the merits of a buy and hold strategy we are only taking into account the past 2 decade and a half, and that was a bull market period. Alter your start points and the buy and hold merit arguments go pooooof .

Long DGP in trading account

Edit/Update: In regards to the excessively over priced nature of the market right now, here are some stats via Zerohedge which goes to show how overbought the market is right now (quoted in green below):

1. Fully 84% of the stock market is now trading above the 50-day m.a.; financials are running 26% above their 50-day m.a. in a gap we have not seen in 20 years.
2. It’s not just the banks that are hoarding cash – so are portfolio managers (ah yes, the proverbial “dry powder” … or maybe, just maybe, cash has become an integral part of money management): According to Morningstar, almost 30% of diversified US stock funds now have more than 5% of their assets in cash; for the entire fund industry, the cash-stash stands at a 5.9% share compared with 4.2% a year ago.
3. According to Moody’s, the ratio of companies having their credit ratings cut versus the number being upgraded (an indicator of declining credit quality) has reached its highest level since 1983.

But the equity market is somehow up 27% in march on pure sentiment. Sigh

Profit taking

I took some profits today by selling ESI, ITT Educational Services, for a 10% gain in just about 5 days. I am holding onto my double long gold ETF DGP, waiting for the market to realize the implications (read hyper-inflation) of the monthly-trillion-dollar-printing-bonanza by the Feds.

For now it seems the market is super technical in nature, it is following Technical analysis to a T. And it would be really unwise to go against this current prevalent technical trend, atleast for now. But come earnings season (Apr 4th) HMMMM, that is when the cat comes out of the bag.

Disclaimer: Long DGP in trading account

Buy stocks now

We are rallying, based on a hyper flawed plan by our revered Treasury secretary.
Some easily identifiable flaws in the plan are here.

In short it is more of the same old story of piling Wall street-risks-gone-bad onto US tax-payers. On top of that wall street traders who usually suffer from some severely acute form of short term amnesia (recent wall street trading philosophy: forget all long term indicators, data points about the recession/economy but lets focus on that one thing, Geithner today, baltic dry index last week, china hoarding commodities and preparing a surge a week before that and so on, which though bad/meaningless, atleast sounds nice), immediately go bonkers and gung-ho on the bull side and thus shit like bank of america, citigroup, morgan stanley are up 15%+.

The other shitty basket also known as REITS are also surging, again for no real reason in particular, well essentially based on a spin that home sales increased month-over-month by about 5% (in reality they are down 4.6% YOY!!!). These are prime short candidates based on their huge debt, problems with their revolving credit lines, secured debt facilities and the immensely tight credit market. Goldman Sachs has an extremely bearish outlook on the REITs and rightly so. I myself will try and short these in the next couple of days, primarily via shorting the IYR ETF.