This column was originally published on RealMoney on May 25 at 9:38 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.
How long can it go without the fundamentals mattering? I think that's the question.
The answer, of course, is that when the
blinks, fundies will matter again. Right now we hold strength against both individual companies and the economy.
I keep thinking about May 1994 when the strongest companies went down pretty much every day until the Fed raised rates and said, "We will take a pause." The pause caused the cyclicals to spike beyond belief and, I swear, you could not get in. You just couldn't. You had no opportunity to buy
Now, 12 years later, it could be even worse. The ETFs will get grabbed, the futures will ramp and you will be left empty-handed.
In the meantime, though, it is the house of pain.
Understand that you own the
because they help you stay in the game. They cannot, however, give you the performance that you will get in the snapback.
However, if you don't believe the Fed will take the pause this year, you truly need to be diversified only into the medicine chest and the supermarket. That's a bet I don't want to make. I have the tire marks all over me from when I was
the cyclicals in 1994 and couldn't bring them in.
And not to be dismissed.
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