In an effort to provide some additional color on how RMHI is approaching the first three quarters of 2010:
- 2008 and 2009 were trend years. This means the trend in place at the beginning of the year was a trend that stayed in place all year long. We do not expect 2010 to be a “trend” year. 2004 is a good example of this as we were in the second calendar year of an economic rebound and the stock market tread sideways for the bulk of the year.
- We do not believe there will be a large prolonged move to the upside or the downside this year as we saw in ’09 and ’08. Hence, selling dries up quickly after a sell-off and rallies exhaust themselves just as easily. A good environment to “buy the dips and sell the rips”.
- Extremely unlikely to see an economic or financial market collapse despite the headlines. The issues in Greece and Dubai are essentially aftershocks to the big quake in 2008. If you sell out on such headline news you’ll likely regret it quickly.
- The boring sideways range should not a long term affair. More likely a doldrum lasting months not years, similar to 2004.
- Considering how we’re positioned, a sharp sell-off would be very welcome.
Be careful out there
Brad