Sell Into the Rally

Okay, I think that you have to watch out for all of the telltale signs that are happening today. First, over the weekend, Barron's magazine came out with the cover of "Dow 15,000" and, as any contrarian worth his salt can tell you, this is the kiss of death to any rally. Just as a magazine title or cover that portends nothing but doom and gloom after a prolonged bear market can signal the start of a bull market, just so can the reverse be true.

To listen to the media personalities today, one almost had to gag. It was like some giant love fest about Jeremy Siegel and his prediction in Barron's magazine. Some learned individuals came out against the article citing his starting points in his research. I'm reminded of an old adage, somewhat appropriate, that states; Liars can figure, but figures don't lie. In most cases, however, the liars can make the figures lie, simply by cherry picking the starting points of their data. In all fairness, I haven't read the article, but Jeremy Siegel, a professor, does have a vested interest in pushing his book; Stocks for the Long-term, as well as the Wisdom Tree family of ETF's that I think he works for. Can he really be trusted as a legitimate, unbiased source of information. Maybe because he's an old, bespeceled man, that should inspire our trust, but one is reminded that Bernie M. wore glasses too. Be careful in placing your trust. Anyone, it seems can say that in the "long run" that stocks will outperform, being that the data includes the late 1999 insanity that pushed the averages higher, whether warranted or not. So, it seems, that these Wall Street phonies created their own data by their own foolishness. When they were trying to talk every Tom, Dick and Harry into internet stocks in the one period, they were preparing to use that data later to point to the overall success of their methods. How convenient is that?

The bullishness of the market participants should lead one to believe that maybe it's a good time to take a break. Build a fire, read a good book, like "American Gridlock" and debate the high and low tides if you live in a coastal community. Don't even think about committing new money to this vastly extended market. Wait for the dive of up to 5-8% and then consider dipping your toe back in, you may save yourself a LOT of time an aggravation, not to mention money.

A LOT of these so-called "market mavens" hardly mention the retail sales figures that come out tomorrow, which should show the American consumer firmly back into his shell, trying to figure out how to make the bills left over from Christmas and nothing else. Besides the cold weather, the overall atmosphere in the country hasn't changed, despite the fact that Apple might have crossed the $500 mark. What a crowded trade that must me. So, a guy that comes on television, that has already written a book about How to Buy High and Sell Higher should be telling you to jump in to the stock. He's not even suggesting holding your nose first. Wow ! Some of the so-called "talking heads" are asking the question, has the market come too far too fast. I think this is their way of making themselves feel better about taking Mom and Pop's money tomorrow after they jump in. I wish these guys would have continued to follow the "full disclosure" method of recommendations. I haven't heard any of them mention that they, in fact own what they are telling you and I to buy. Why is that, you HAVE to ask yourself.

Wait, a minute, Doug Katz is actually telling people that it may be time to take some money off the table and sell your stocks that have made a big run. Apparently, some of the "perma-bears" have changed their minds and are now forecasting nothing but smooth sailing ahead. This is surely another warning sign, that one should combine with the Barron's piece. Cudos to Dougie, he probably sold today as the market melted up again. This rally is mainly due to Apple stock going up and up, thinking that they will revolutionize television next. We'll see. Just be careful out there.