November 17th, 2011 Market Recap with Gold Update

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The bears claimed victory today as further uncertainty in Europe caused both the NASDAQ and S&P 500 to fall and close under key support levels. Both indices shed about 2% and volume was well above average signifying further distribution.

Readers of this blog have heard me say time and time again how extremely difficult this market is to navigate. So difficult that honestly 100% cash, even with its .0001% return, has been far more comforting to hold as a position than equities.

For professionals that are required to stay 100% invested at all times, this market is a nightmare. Today Bloomberg posted a detailed piece citing how Bill Miller, the investor who went on a 15 year win streak through 2005 managing the Legg Mason Capital Management Value Trust (LMVTX), has been ousted from the helm. From the Bloomberg article,

Miller, a value investor known for his bullish views of the economy and stock markets, became mired in the worst slump of his career as he wagered heavily on financial stocks during the 2008 credit crisis. Value Trust lost 55 percent that year as the S&P 500 dropped 37 percent, including dividends, prompting a wave of withdrawals. The fund’s assets have plunged from a peak of $21 billion in 2007 to $2.8 billion.

Stories like this one have become common occurrences throughout 2011. Overall I can’t stress it enough, stay frosty (sharp) out there and I will see you after the weekend break.

PS – Looks like next week could be very interesting to say the least as there has been basically no progress from the deficit-reduction committee in getting something passed before next week’s deadline.

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