Time to be disciplined
Sell your debt-resolution plays and focus on stocks that won't be derailed by a US default.
Back to individual stock picking -- for now. That's how I view this debt ceiling deal, which I believe will pass simply because every single reporter says it will, and I have to trust the consensus like everyone else or be run out of town on a bull.
To me, if you bought "exposure," meaning deep-in-the-money calls or some higher-beta stocks on Friday, as I suggested here, you sell them into strength, take the profit. You didn't get to build the position, but you did get to make the money.
Then I would just wait. I would wait for the people who have to come out and say:
1. Didn't matter, too small, we will eventually be downgraded.
2. Nothing's changed. We are still dysfunctional.
3. Things are even worse because now there will be less spending to prop up the economy.
4. It's too late, as the second half has been killed by this wrangling.
5. The deal does not clarify taxes enough to make companies feel good enough about spending.
6. China is still slowing, although not as fast as we would like, because the tightening goes on.
10. Country to be named later
In other words, the whole litany of woe -- it hasn't changed, it won't change. We are in a new, bad world that makes it so we lurch and lurch until bonds are no longer the issue. That's the real problem, by the way: trying to figure out where the bond issues hit the stock road. It has been the problem since the beginning of the sovereign debt issues in Europe and since both former President George W. Bush and President Barack Obama decided to authorize a huge amount of spending that was embraced by Congress.
All you have to know, though, is that bond markets affect S&P 500 ($INX) futures, so even if you think some stocks shouldn't go down when the S&P futures go down, you are helpless to argue that because the issues are so big, meaning you can't get your arms around what a real Spanish default would do. There's so little clarity about who owns what and who insures what that you have to presume every country is Lehman Bros. until proved innocent.
For the moment, though, we aren't Lehman, and that's why after the rally, but before the parade or woe, it is time to shuffle the decks and get rid of exposure. Then you can focus on buying the stocks of companies that performed quite well in this environment that aren't all that expensive and will no longer be derailed by a U.S. government default.
So sell banks into this strength. Sell tech into it. Both are wrong. Consumer stocks that needed a stronger economy should go. Pick and choose the Chinese-levered industrials. And let the rest meander, unless you bought it Friday for a pop. Be disciplined. Sell that pop.
Politicians have managed to make this country look like clowns to the rest of the world. Hopefully voters will try to restore our respect by voting out the men and women who do not deserve to represent hard working and honorable citizens of the greatest country in the world.
Look like they are playing the same game, after lots of talk and yakking, they up the debt a few trillion more. No words from either side about serious spending control or cuts. Serious cuts are, abolish the automatic balanced budget system that ups debt every year a few trillion, dump Obama care before it kills us all, dump EPA and a few hundred other worthless programs, FIRST THING IS put a stop on the printing press, how did the Fed. get such unlimited power? Have the people given up all power to a show in Washington?
Simple problem, Washington has taken control of this nations money, and they are not going to let the people have anything to say about money, lots of talk from both sides but no real action. They are all in the same bed together, put on a show for us while they plot how to take the next dollar from the people. Same show for the last 100 years.
HE WHO CONTROLS MONEY, CONTROLS ALL. FOLLOW THE MONEY.
I've buying high quality, nice dividend paying stocks for several years thru my own auto monthly investment plan along with div.-reinvestments. This has been working out very well for me.
I collect SSI and have set up a direct investment thru a bank where my monthly SSI check is direct deposit. Then a specified monthly amount is direct investment in several stocks I've chose. This amount plus the dividends and the possibility for capital appreciation works out very well., especially over time.
One benefit by investing this way is you don't even have the opportunity to spend the check. Out of sight out of mind more or less.
I started collecting SSI at 62 and will continue on this plan until at least my normal retirement age of 66 2/3rds. After this I will decide if I want to continue or not. Plus I will have the option of any type of draw down from my investments. This option would not be available if I had waited to 66 2/3rds. to begin collecting SSI.
This plan isn't for everyone but if you don't need the monthly SSI check to live on it can be a viable option.
NOK with their Div. and at less than 6 bucks/share...heck of a buy folks!
Also when will GE come storming BACK?
The legislation would slice more than $2 trillion from federal spending over a decade and permit the nation's $14.3 trillion borrowing cap to rise by up to $2.4 trillion, enough to keep the government afloat through the 2012 elections — a key objective for Obama, whose poll numbers have sagged as the summertime crisis dragged on.
And lets get rid of the dept of transportation. we don't need roads or railways either. We certainly don't need clean water either, so I'm with you on dumping the EPA as well. We can just drink oil.
Oh wait, I almost forgot. Lets get rid of parks and forest protections too. After all, we've proven nature can be controlled and manipulated and we'll never run out of minerals or trees, right?
Monsanto has shown us we can be better than nature with their Genetically Modified Organisms. Who cares if a few million people and their goats die from eating it, as long as the company can still make a profit. Right?
Copyright © 2014 Microsoft. All rights reserved.
4 analysts downgrade the stock the day after a disappointing quarterly report.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.