Moving to 100% cash
Well-known market follower Barry Ritholtz moves to an all-cash position -- and just in time.
Wednesday, a day before the U.S. stock market took a steep dive, money manager Ritholtz announced that he had gone 100% cash. "We have no positions long or short," he wrote on his blog, The Big Picture. "We are actively looking for shorts."
Certainly he's not alone. Investors everywhere have been seizing on any news to jump ship. But Ritholtz is a well-known market watcher, and when he does something as dramatic as this people are sure to notice.
Early Thursday morning, he explained the reasoning behind his move. It had nothing to do with the crisis in Europe, he said. This was strictly a technical call based on market internals, sentiment, volume and other factors.
Ritholtz is the chief executive of Fusion IQ, a market research firm. He also wrote the book "Bailout Nation."
"Ideally, if we get lucky, we will see a rally over the next week, with deteriorating characteristics — that sets up a better entry for shorting new positions," he writes.
Earlier in the week, Ritholtz began to sense that the market was in more than just a run-of-the-mill correction. Heading into 2010, he writes, he was about 30% cash. By the time April rolled around, he raised that to 50%.
"I still expect a 25% correction at the end of this rally," he wrote Wednesday. "I am unable to say with any degree of conviction that the current market turmoil is that major move down."
I imagine he might have more to say on this after Thursday's dramatic market plunge.
"In addition to being very smart, he also has chops as a market timer, having been bearish before the big crash, and bullish at the bottom," writes Business Insider about Ritholtz.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
More Market News
|There’s a problem getting this information right now. Please try again later.|
LATEST MARKET DISPATCHES
- No more Dispatches; here's where to find market news
The Market Dispatches column has been discontinued. Here's where to find the latest stock and business news on MSN Money, and the latest from market writer Charley Blaine.
- Dow falls 59 as late-day gloom kills a rally
- Stocks held back by fiscal-cliff worries
- Stocks suffer worst weekly loss in 5 months
- Dow off 121 as post-election swoon continues
- Dow slumps 313 after Obama's re-election
- Dow jumps 133 as Americans head to the polls
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.