This blog post originally appeared on RealMoney Silver on Sept. 2 at 7:35 a.m. EDT.
Build up cash reserves by reducing exposure to equities and credit.
Upgrade your portfolio to quality. Eliminate secondary and tertiary stocks that have benefited the most from the second derivative and statistical economic recovery.
Longs: Concentrate on market-share-gaining multinationals that are self-financing, that do not rely on the kindness of strangers to fund growth and that will benefit from a lower U.S. dollar.
Shorts: Consider shorting stocks that are levered to the capital markets and the consumer -- for instance, brokers, asset managers and retail-related stocks.
Err on the side of conservatism over the balance of the year, and recognize that, at times, it's more important to place a priority on limiting the potential loss on capital above the possibility of sacrificing lost investment/trading opportunities.
Reread the books written by the old masters of trading, investing and even poker in order to gain a greater investment perspective. You should always try to learn more, and you can from George Soros, Jim Cramer, Barton Biggs, Jim Grant, Charles Mackay, Rich Bernstein, Doyle Brunson and the others who have written of their experiences.
Gain or regain a better balance in your life. Whether it's gardening, exercising, vacationing, going to sporting events or reading, it's important to clear one's head, step back a bit and gain a better perspective -- it's healthy food for the body and mind.
In summary, I believe that, similar to back in March 2009, we may now be at a
in the U.S. stock market. It is, again, time for a variant market view.
My advice is to reduce your risk profile by raising cash, upgrading the quality of your trading/investing portfolio, chill out a bit, read some books and words of advice from the best there is/was and, generally, to err on the side of conservatism in the months ahead.
Doug Kass writes daily for
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At the time of publication, Kass and/or his funds had no positions in the stocks mentioned, although holdings can change at any time.
Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Long/Short LP.