“Stock market is on fire since she went 95% cash in March ’06.”
This isn’t a totally fair statement. The S&P 500 rose a tiny bit until early May, then dipped from there into mid-June. Had powayseller bought back in sometime around July or August, I’d say that was good market timing.
Most of the good economic analysis I’ve seen predicts a 40% or so chance of recession in ’07. But how far will it go up before it goes down? And how far will it actually fall? How much worse would imperfect market timing be compared to Buy and Hold? From my reading of Roubini, the average decrease in the market from peak to trough is 10-20%. The S&P is up 10.2% on the year. 3rd quarter profits have been solid, economic indicators are mixed. A lot of the big boys are predicting somewhere in the low 2% for GDP growth in ’07. Energy prices are down. The earliest I could see a recession would be late ’07.
I’m 100% certain there will be a recession in the future. I’m also 100% certain I’m not 100% certain when it will be. To me, the lowest risk strategy is to buy and hold solid companies.
