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November 8, 2005

New column for TraderDaily.com, Tues., Nov. 8, 2005, 4:18 PM

Some of you might know there is a flashy magazine being published today called Trader Monthly" founded by Magnus Greaves. His group also publishes TraderDaily.com plus a weekly eNewsletter. I decided to join the fun, starting tonight at midnight ET, with a column called (I think) Check and Balance".

Any way, we all need a balance, and I figure you can never have too much fun when trading the capital markets. So let's see how it works out.

The first column I did two days ago. In future there will be much less elapsed time between my writing and TraderDaily.com publishing. That's good because I'm trying something unique (for me) with that TD column. I hope you like it.

Posted by Posted by Bill Cara on November 8, 2005 04:18:15 PM | Category: TraderDaily.com

Discourse

Ho Ho, still taking on the booyahboy, I see. I love PFE at this price and have squirreled it away.

Question: What if we get one of those slow, grinding down declines that everyone fears? Say a two year ratcheting down to a PE of 10-11 on the Dow. Are there any tactics appropriate for that except in and out, in and out? That would be hell but we've (you've) seen it before.

Posted by: MarkM [TypeKey Profile Page] at November 9, 2005 5:10 AM [link]

Mark- Cramer happens to be generating a lot of public interest. A month ago I would have used the TraderDaily.com column to take on the gold trade recommended by Don Luskin. In my next column I may go up against a Merrill Lynch change in recommendation, etc. Really, even though the first article was about Cramer, the column is not. It's about me trying to stop cheerleading on the sell-side, and having fun (in a different forum) at the same time.

On your last point, you ask an excellent question. Should inflation continue to develop, there will have to be a continued raising of interest rates, and a resultant decline in PE multiples. In effect that would be a secular bear, requiring new strategies and tactics.

I have already seen how the traditional defensive sectors (consumer staples and healthcare) are getting hammered, and may not be so defensive in the year(s) ahead.

The water-torture scenario (similar to 1973-74) that could unfold (based on stagflation) is a frightening prospect. Having been through both, I really prefer to get my medicine like 1987. In other words, if the bear is going to growl, let it roar, and then be done with it.

/Bill

Posted by: Bill Cara [TypeKey Profile Page] at November 9, 2005 6:41 AM [link]