There has been much discussion over the last month and half about Bear Markets, Sell-offs, the Global economy and a possible Recession. The vast majority of analysts believe we are not in a recession (neither the U.S., China, nor Europe) and that most economic indicators seem to point to the fact that overall the U.S. economy is strong. In fact, most analysts indicate that there is only a 20 -30% chance of a recession in the making for the U.S. In addition, trucking and retail industries are showing signs of stabilization indicating that things did not get worse in January. The factors that are seemingly the 'cause' of this downturn are angst surrounding global growth, politics, oil and Euro banking woes and each day one or another have been blamed for the sell-off during this downturn. However, none of them should be a catalyst for the down market indicating a true disconnect between reality and what investors in the market are thinking. It is important to note that when investors are buying in huge rallies it's traditionally thought the market has created a herd mentality however, when they are selling in bulk during downturns there is an assumption they are right.
For us we believe patience is the key. The 'selling stampede' will end we simply must wait for it. It can be counted on one hand how many stampedes lasted more than 30 days (we're currently at day 31). It is natural to worry but don't panic – we must keep our heads, work hard to manage the risk of the portfolios and maintain a long-term perspective. Often times we can foretell a bottoming process when the smartest people are feeling stupid and we have heard several market gurus indicate just that sentiment. Hold tight, have patience and keep your head.
Having said that, we are unafraid to sell when we have realized a mistake was made or an investment isn't performing well and are taking a hard look at every holding – analyzing their fundamentals and comparing them to their categories. When this is over there are going to be some great buying opportunities. We will be looking for 3 preferably 4 positive days before we will be ready to believe a bottom has been reached. Several weeks ago, we raised some cash in your accounts and when we believe we have reached the bottom, we will notify you prior to employing any assets.
We have completed our move and our new address, phone numbers and emails are:
Attentive Investment Managers, Inc.
5345 N El Dorado St Ste 5
Stockton, CA 95207