Tuesday June 26, 2012
Recall this past weekend that we noted this was the end of the quarter for many funds. I mentioned funds engaging in window dressing. That means the funds are adding stocks that have advanced recently (see how smart we are with your money) and shed stocks that have lost value. I have mentioned several stocks that have lost value. They are losing more now due to such window dressing. Fund owners do not want to see losers on the holding list, though that would be preferable to dumping them at a loss near probable lows.
And remember the strategy. We recommend a succession of orders in small quantities. I have no idea where the bottom for any particlar issue will be, and neither does any one else. So creep in, don't jump in.
Crude oil is a good example, lows in oil usually occur during crisis conditions when experts are predicting even lower prices or as in 2008, a new permanent low for oil that could not be budged for perhaps years given the large inventories and lack of demand. Of course in a few months, oil shot up in price.