Right now I find myself extremely eager. I have a strong desire to trade but the markets just seem like their in a very weird position. There are very convincing arguments coming from two opposing views; the first swearing the rally will continue because of liquidity in stimulus and signs of "green shoots", the other stating the markets are overbought and a correction is due very soon. I've always found it easier to clear my head when I remove myself from the situation and do something else, maybe even take a weekend getaway to the beach. So this past weekend I took a trip to the Vineyard to enjoy the beaches and island quality of life. With a clear head I reviewed all the information I've gathered and came to the conclusion that the current markets are no place for my money. I believe that in the short term there will be a correction in the markets.
I am waiting for the right time to enter a short position. I think I will most likely short the financial sector because they have the worst underlying fundamentals. Right now alot of the wallstreet gurus are on leave, but since september and october are traditionally the worst months I believe their return will spur a stiff correction for the financials.
I do believe though that companies directly effected by the stimulus will do excellent in the longer term. The government has a few major changes that they will push no matter what, and the money will flow towards their ideals. The first one is healthcare, Obama has vowed to digitize all health records by 2012, thats as close to a guarantee as you'll ever get.
The second change will have to do with natural gas. The US has an abundance of natural gas and yet we continue to use foreign oil. We could save trillions if you were to use our own resources wisely, which Obama will most likely push.
Third is the fact that the US has always been known as the information and technology giant, and in order to maintain that crucial status we've got to push technology.. and hard! We can't let ourself slip behind in this field, so anything linked to new wave technology will most likely see serious gains in the future as the entire world evolves.
Fourth is the need for Cleantech. Alternative energy, water purification, recycling, etc. All of these fields and more will grow intensly as the world moves into a cleantech era.
Fifth is the oil shortage, its a guaranteed gainer. There is only so much and the price will only grow as the supply diminishes, especially with BRIC economies growing dependence.
Sixth is the Smart grid. Our nation electrical grid is still based in the early 1900's. We need a major overhaul in the way we produce and manage our electricity. And this new smartgrid push is no joke. It has to happen if we as a country are going to grow and evolve.
So those are my potential investment ideas for the longer term, but like I said Im going to sit tight until things make more sense.
