My market view

http://seekingalpha.com/article/127105-10-reasons-why-we-still-haven-t-hit-bottom?source=article_sb_popular

I like that article as it states what is obvious to me, but I hate it when most investors agree with me. It makes it harder to understand the metagame if everyone thinks like you. Jim Rogers says that consensus investing is a disaster, and of course, empirical evidence confirms this. I am also a Popperian that attempts to falsify my own beliefs.

I think I should re-enter small short equity indices positions in the US and Europe. 15-20 percent net short exposure using indices (S&P 500 and Russell 2000 mix with a bias for s&P 500) in the hypothetical portfolio. S&P 500 is at 823 today, and it might go up to 9000. 8400-8500 might be the actual resistance though. I also should try to remove some of those equity longs except those that have commodity exposure.



Of course, I got burned on bad currency bets (betting that the dollar would strenghten) and bond bets (short 10 year US treasury) in the putative portfolio on March 18 because of the FOMC announcement of quanitative easing. I am now dollar bearish in the short term and would add to the SEK/USD position. I thought the trade deficit would fix itself, but it didn't. Furthermore, an increase in oil prices would exacerbate the trade deficit as traders bid up the price of oil. I think there will be a time (an emphasis on time) to short gold, copper, and

I do not know enough about the European equity market though. I wonder if the strengthen euro is priced in (I need to do more research on the portion of the European economy as exports to the US) or the Eastern European crisis. Too bad I cannot see the IR/NMR peaks on European equities and see the absense of "strengthening Euro" or whatever in their pricing in an attempt to arbitrage the difference between market perception and reality. You never invest on consensus, and I think these things (except perhaps strengthening Euro) are already priced in.

Since the state provides for the people in Europe, I expect lower discount rates among Europeans. I also assume that massive amounts of retirement money hasn't been shoved into European equities so my discounting hypothesis above would not apply in this economy.

The risk/reward for European shorts does not seem compelling, and I have other things to do now besides study the market.

I havent looked at enough on Europe though.