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Latest Positions (and Predicting how long the bubble will last)

Cody Willard

Apr 1, 2013 — 2 min read

It’s been a steady drip lower in the market action all day and the path of least resistance seems to be pulling us lower.

I remain heavier in cash and with more puts/short hedges than I was a few months ago. Ebb and flow with the market.

The question for everybody now is — how long will this stock market bubble last? That is not how investing in the stock market is supposed to work, but our Republican/Democrat Regime has bet the nation on ever higher stock prices and ever higher corporate earnings. It can go much higher and get much crazier before the bubble pops. But it’ll be ugly and tough to get out when it does. We need to stay vigilant in our strategies. The Great Stock Market Bubble that we’ve been set up for is here.

My feet-to-fire analysis for the way this economic and stock market cycle will play out (note that sometimes the stock market can boom in bad economic times and vice versa for years on end though) is this —

We get into late 2014 and the S&P 500 spikes 10% in a single quarter (sound familiar?) to over 2000 (up 30% from current levels) and the DJIA does the same to get over 17,000. Corporate profits and profit margins and cash flows and cash levels will all be at yet new all-time highs. And then somewhere in late 2014/2015, we start to face some of these end-games from the ongoing bailout/fraud/confiscation schemes that the powers-that-be keep forcing down our throats in the name of “saving your economy”. The markets go through a huge panic and meltdown, the banking system and the status quo government that it owns get booted, laws get enforced, crackdowns on state and federal corruption (including heretofore seemingly acceptable corruption like the revolving door and regulator capture and even much of what today passes for “lobbying”).

Somewhere in 2018 confidence starts to return to the system and the S&P 500 starts a new long-term bull market from the about 800 or so (60% off its 2014 high).

In the meantime, we have the fortunate set up of having been way early to calling for this ongoing stock market bubble.

(See:

Thinking it through — the case for a bull market Sept. 1, 2009 | By Cody Willard

A couple ideas on how to trade the Money Supply Bubble Nov. 5, 2009 | By Cody Willard

Are Apple and Google in a bubble? The answer will surprise you Oct. 28, 2010 | By Cody Willard

Get ready for the new tech bubble, the biggest bubble of all time (UPDATED) April 7, 2011 | By Cody Willard

The great inflating bubble June 14, 2011 | By Cody Willard)

And our strategy of buying the panics and then selling euphoric spikes has worked very well over all. I don’t think it’s time to make any big changes to the strategy here, as I expect this stock market bubble to get bigger yet before blowing up. I’m just letting this near-term action play itself out a little bit and expecting another short-term cycle of panicky action to return to the markets.

Here’s a list of my latest positions in approximate order from largest to smallest. I give each stock a current rating from 1 to 10, 1 being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment” (there will never be a 10 rating, because there is no such thing as a perfect investment, of course). Anyway, here’s the list:

Longs –