Kass: Sell Rosh Hashanah
This column originally appeared on Real Money Pro at 8:05 a.m. EDT on Sept. 17.
NEW YORK (Real Money) -- Over the past four months or so, as the markets approached and sliced through my fair market valuation of 1390 on the S&P 500, I have been moving toward an underinvested or net short position based on:
- an out-of-consensus, negative and what I had thought was a realistic view of the world's economies;
- a deteriorating outlook for corporate profits;
- somewhat stretched valuations, given the unique structural headwinds; and
- other exogenous risks, including but not excluded to the world's geopolitical temperature was rising.
- Most importantly, spend some time objectively reevaluating your investment thesis.
- Be honest with yourself in challenging that thesis.
- If conditions have changed (which they have not), change your investment strategy.
- Seek counsel from smart investors you know and sit down and discuss your thesis and get his/her feedback.
- Take 10 deep breaths and do nothing for a while. Similar to Being There's Chauncey Gardiner, just sit there and observe.
- Stay balanced emotionally, and don't press your investment positions.
- Do not double down or average up until some time elapses and you have enough time to settle down, analyze your positions again and, again, get input from others.
- Finally, if you conclude that your current investment position is not wrong-footed, do not be dissuaded, and stand firm in your view.
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