INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I include the economy and markets to check my perception of the bigger picture. I post in case it helps others too.Economy & MarketsI think the short term is looking favorable. It is easy to complain about the economy and the markets, but the NASDAQ's return to the trend line it followed from 2004 through 2008 suggests that many things are returning to normal. Despite the turmoil in the markets and currencies, the US GDP has remained extraordinarily large, even with a few percentage point drop. That's a lot of sustained momentum from which to build. I know it is tough out there because part of "out there" is right here in my home. I've been looking for a job for ten months now. (Here's my jobs report from last month: http://trimbathcreative.wordpress.com/2012/05/23/my-jobs-rep...). I haven't been hired - yet - but I've noticed two hopeful trends. 1) My local paper's job section is stretching out over more pages. and 2) There's been an apparent rise in the hiring of recruiters. Those trends aid more than just me.The long term has as many apocalyptic worries as ever. Federal (US) debt and deficits, trade imbalances, threats of hyper-inflation and deflation, potential Euro and EU collapse, possible China hegemony or implosion, and severe impacts from environmental disasters are all effects that can dramatically redefine every economy and every market. I'm also seeing a renewed interest in alternate economies and currencies, decentralized systems, more emphasis on local resources and community, many things that reflect a retreat from reliance on global or national sources for essentials. Some of these discussions are being held by ex-hippies who subsequently got degrees in economics, spent decades within the system, and now know that it is not sustainable and that something must take its place. That's not a good environment for investing in large public markets.As bad as things are in the US, the US economy may become the safe haven yet again, not because it is stellar, but because many of the other choices are so uncertain. Faint praise, but sentiment can sustain a currency and an economy, as long as no major disaster strikes. I'm an optimist, but I have no desire to buy waterfront property beside a rising ocean, or invest in financial institutions amidst growing uncertainties.Imagine how much better I'll feel about the economy and the markets after my finances improve. Anyone need an aerospace engineer who is also a writer, public speaker, consultant, and entrepreneur? Anyone want to buy my house?(Search on tktrimbath for the details of specific stocks that I own.)
Thanks for your comments, tktrimbath.The strength of the US economy is certainly good news, but the worry is that the numbers we have are backward looking. The slow down in Europe and all those state layoffs have to bite into current sales. Already companies are revising their earnings expectations downward.Earnings season starts with Alcoa in only a few weeks. We shall soon see how bad the numbers will be.I looked over your CAPs portfolio. You seem to be a long term investor. That is usually a good idea for small investors, but holding your losers on CAPs hurts your score. If you have faith they will recover, you are best off to sell and then rebuy to get positive score as the recovery occurs.Holding losers on CAPs is a losing strategy. And with $8 commissions, why hold them in real life. Avoid the wash sale rule, but otherwise dump them and take the tax writeoff.
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