NEW YORK (Real Money) -- If you didn't know any better, you would say the recession started last week, when the Federal Reserve signaled that the time to get tough is nearing. The only stocks that reacted well yesterday were stocks that are staples, which are beneficiaries of the decline in inflation. Everything else, particularly anything that needs even a remotely robust environment to make money, was killed. It was as if the recession chimes went off and people fled from stocks that six months ago they couldn't get enough of.
The industrials acted with violence. And don't I know it. We have some really horribly acting stocks for Action Alerts Plus that are meant to shine in a 3% growth environment, and they were crushed. It was the worst day in ages for that kind of portfolio, and the pain is palpable.
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The problem is that for many stocks we are past the point of no return. Let's take Freeport-McMoRan (FCX) . It can't lift to save its life. The yield support of 3.77% would normally have saved it, but now it trades as if the dividend isn't safe, or as if rates are going to skyrocket, or worse, as if this is 2008 and that means the earnings are going to plummet so a 3.7% dividend means nothing, nothing at all.
Do you sell it now, betting that it goes to $30 and you can buy it back? Do you just wait, betting that every stock bounces?