Cash is King (Put Your Helmet On)

The bailout is a rip-off of the taxpayers. It would be more effective and less expensive to simply guarantee all bank deposits. In the end we will have to do that anyway. So why give $700 billion to the Wall Street speculators who were foolish enough to buy the bad assets.

Anyway, the optimism of the pending bailout/giveaway created an opportunity to unload some stock… so, I sold a bunch of my stock into the pre-bailout rallies. Mostly I sold the last of my company stock, and also my GE and KBH. I continue to hold BAC, USB, plus the misc mix in my 401k accounts.

I also hold some dollar notes that I bought in August (I should have bought in July). They are a bet on the US dollar rising vs. the Euro, GBP, CAD, and CHF. So far so good.

At this point I have only 7% of my investment assets in the stock market. I continue with 36% in rental properties, and the remaining 57% is in cash.

When I believe we are at the bottom I will buy for the rally. I do anticipate a rally this year, followed by a return to current lows or lower prices thereafter. I expect the stock market to have a fairly slow and weak recovery after the final, real bottom is found.