Investment horizon Summer-Fall 2008 7/20/08

discipline. no impulse purchasing is what is required. no economic turnaround can be expected before spring 2009 at the very earliest. economically, the worst has not been experienced as constrained consumption has not yet hit fully the company bottom lines, which lead to a further round of constraint. any turnaround will require the bottom of housing prices being reached and restarting a float upwards. the fed must continue to reflate until next year. guidance for the next half-year: (its going to get worse!!!) 1. trust in the dollar will experience another round of unpredictable weakening. 2. oil will float up on any dollar weakness (currently 129), but 115-125 a barrel seems about right 3. the dow will eventually head south of 11,000 (currently, 11,500) 4. add to VTI position when dow dips under 11,000 5. recycle trust accounts at Wachovia - late July 6. add to google when it reaches 420-430 7. add to PBW whenever it approaches 17. 8. face ignorance on the muni bonds if they continue to show weakness.

Here's what i saw in March:

we want to continue to remove risk from the downside. I do not trust the market has seen a bottoming. More patience is required to end my fruitless chasing of trends. Long-term we are attempting to step outside any overtly speculative positioning. for now, only our shorting positions are speculative in expectation of the market trending towards 15000. if this expectation proves mistaken, we must suck it up and accept our losses. but by all means, patience.
not unusually i'm continually making the wrong moves with my portfolio. i want to stop the chasing and cut way back on the trading.
short-positioning
we want to make changes to holdings no more than 3 times a month. i continue to expect that the market is going to break through the lower 18000 threshold for the dow. i am overweight on shorts. We will cut half the shorts at 19000 on the low end or 28000 on the high. close the position at either 18500 or 30000. At 30000 we will end our shorting expectations.
long-positioning
We wish to move toward buying index funds as market searches for bottom. We will try to shift balance towards fixed income funds. need to work out a balance. for now, 50-50 stocks and bonds.
At 19000 i will start buying vanguard large cap. adding to the position with every drop of 100 points.
we will buy pbw, vti, vv as market reaches 19000 and more as it falls from there by 100.
bonds: we will add to our postions twice a month
individual stocks:
spwr only at 50.
cash: move to savings account

Retrospective look:

Could not maintain discipline as dow bounced all the way above 13000. got killed on the short position. mistimed sunpower twice. getting hammered on Google. muni bonds so far a big bust.