Stephen H Baum Leadership

Wall Street Weebles
For the past two years, there has been a great deal of volatility in the stock market. That means to me there have been days when the market rose by 180 points and days when it fell by 180 points. And neither the rises nor the falls were the trend. They were volatility around the trend. So it was possible to make money by “volatility plays,” using index puts and calls or actual stock puts and calls. As Warren Buffett counseled, being optimistic when the market was fearful and fearful when the market was optimistic.
During that period, the market wobbled, but it did not fall down (remember Weebles?).
Then the bottom fell out.
Now there are fundamentally sound company shares available at much lower price/earnings or market/book ratios. As you have seen, there is still a lot of volatility – up hundreds of points one day, down hundreds of points on other days. The question is: when will we back to volatility with a recovery trend? If and when that happens, the market will be wobbling, wobbling and there will be profit opportunities and an upside.

As for me, I would rather miss the first 10% of recovery, even 20% of recovery than get burned again with a 15% or 20% further decline.

That’s my view. What’s yours?