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 © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. 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 Morningstar Inc.
[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'