Here I sit one week removed from the yearly family trip to Disney, utterly missing every minute of the trip. Certainly, my kids miss the trip, in particular the relaxed, no rules environment a vacation week with Dad brings. During my one week off per year with the kids, I pretty much let them run my show. That's not the week for "Daddy discipline". All I have to deal with is my poor wife continually lamenting I am turning them into "spoiled brats". She has a point, on multiple levels. So let's borrow my wonderful wife's astute assessment for us investors for a minute. Have we become "spoiled brats"?
The last six weeks of 2009, I spent countless hours researching, analyzing, and strategizing a game plan for 2010. I laid out that plan on this very website. A "baseball season of frustration" I termed it, with continual temptation to change the strategy. Folks we got spoiled in 2009, the recovery from March 9th, 2009 only comes around a few times a generation. It was easy, global central banks stepping in and assuming risks when nobody in the private sector would dare to. A Federal Reserve that became historically accommodative for risky assets. It felt like you were standing in the batter's box swinging at beach balls all year. This year, it feels like we are swinging at golf balls, but let's get our proper perspective back. Stick to the plan!
The plan was a low volatility environment all year, certainly the much talked about absence of volume confirms that. Where did we want to be - Corporate Bonds, Energy, Info Technology, Natural Resources and Market Neutral strategies! Do we want to dollar cost average, this year absolutely, yes! Should we expect a "deep dive": NO only shallow corrections. Should we expect "melt-ups": NO, the action year to date does not support "momentum buying". Three speeds, underweight, market weight and overweight - always on the track in the game.
Here in New York we have what is known as the "cab driver mentality". Basically, a cab driver scours for possible passengers / opportunities. He knows in advance where he wants to go to finding the fares. Throughout the day, he grinds it out, small fare here, and small fare there. Boring as all heck, but at the end of the day he goes home with a smile, and a days pay. Let me reintroduce all of us "spoiled brats" to 2010. This is not 2009 revisited. It will be boring as heck but higher capital market prices will present themselves on December 31 versus January 1.