I’m even doubtful about myself

Oh, boy, the bullish mood these days is enormous and hard to beat, so much so that I even doubt about myself on my bearish view questioning about the sustainability of this euphoric move. I have encountered many times in my investing life, when the market was persistently either depressing or euphoric and I was persistently wrong for days or even weeks to the point that I was even questioning myself “Are you nuts to be so stubborn to be against the crowd?” But my past experience has taught me that nearly every time I would be among the last ones to laugh in the end. The most recent two times with either extremes were the last Dec when the market was persistently depressed and I also got the same feeling that it seems the world would really come to the end with no hope in sight of any meaningful recovery. That was the time I made a bold call for a 20% upside for S&P (see here). Then in Apr this year when the market was persistently bullish to the point that it seemed nothing could stop it from making new highs again and again. And that was also the time I got the feeling that it didn’t look like anything could bring down the market. But I kept myself up and even wrote a blog " How long can you beat the same drum?" on Apr 22. Of course the market kept going up for one more week to reach its peak at that time at 2945 (a point close to my last year end call of 3000 for this year). Then all the sudden the music stopped playing and the market crashed down to 2750 within a couple of weeks.

So I will stick to my bearish view for now when I also starts to get the same feeling of a seemingly unbreakable uptrend. I don’t mind to get a few more eggs on my face because I know when the turning comes, it can be really brutal for FOMOs! Besides, the eggs have provided me more energy for continuing my bearish call.😉😏😅 
Joking aside, it doesn’t mean I cannot benefit from this market move. While I’m bearish overall for the market, I’m actually quite bullish on a few sectors that have been beaten down so badly in the past few months that I have seen their sign of bottoming. So I talked about a few value stocks to my DW Family and fortunately they seem all behavior quite well these days. The general bullish market are certainly helping them but I think even in a downtrend, the beaten down value stocks should also perform relatively well due to the rotational move of the investor’s money that must find somewhere to go. In addition, there are also some greatly overbought stocks that cannot go up any further even with the very strong market. Betting against them could also make some money regardless what the overall market is doing. Within the DW Family, we did a quick short on MRK, which was fortunate enough to yield a quick 80% gain within days. BIIB is another one looking like to falter soon. Then you all know how badly these days for the precious metals. As I said, I’m shorting gold stocks and fortunately enough it is still going in the direction I’m looking for. By the way, we are probably seeing the next shoe drop for gold/silver and the correction is probably very near its end but just still not yet there. We may see gold down towards 1400 to 1420 range before this correction is over.


PS: if you are interested in my DW Family, send me email here.