Mish Shedlock on The Disciplined Investor

Mish Shedlock predicted 40% down on Andrew's podcast back on Oct. 23. The DOW was 8690 back then. 40% down would be 6,200. We are at 6,800 now. So yeah, should have listened to Mish. Just based upon his blog, he really does keep a good finger on the pulse of the world economy.

He was on TDI again. He was pessamistic, and not making any more bold predictions.

• "I can see that technically, the S&P rallies at 600"
• "We could just drift lower for the next two years"
• "Its too late to short"
• "Nothing looks good"
• "Our strategies are market neutral, long some stuff, short some other stuff"
• "Very dangerous environment to start thinking about going long"
• "Very dangerous environment to start thinking about going short"
• "Its a great environment to just be sitting on the sidelines, watching and not caring, and thats what I recommend"
• "This is very scary times. I have not been this scared in my 25 years of experience"
• "Should I get out now? I don't know"
• "Looking ahead, I can see technically that the S&P rallies at 600 or something but thats just at fibonnaci support, theres no real technical support until at 450 if you look at the chart"
• "Technical support on the Dow is 4,500"
• "Hands up in the air very shortly. I am very fearful, if we don't see something tangible, people could be throwing their hands up in the air and it will be like October."
• "Hard to say, but I think more likely is that we just drift down to a bottom with a panic low in September or October coming up..
• "We could just drift lower for the next two years like Japan, interupted by brief rallies. That would be the worst case."
  

Andrew Horowitz noted that he is getting nervous shorting now, just because there is the possibility for a massive rally. Well, that would be really freaking nice right about now. During which point, sell stops get slapped on everything I own.

He also advised his friend Vlad to draw his trend lines, figure out support, then put sell stops slightly below where you think most people are going to get stopped out. i.e. give it a little bit of extra play room.

A sell stop activated on Boralex Power Fund and I exited with a 20-25% profit. Combined with my trust distributions I've got a big chunk to invest in now. Where the hell do I go now? Sangoma Technologies looks undervalued, I'll run it through Andrew's screens and see what it says.

Reading Andrew's book, I came across this table:

The PEG Ratio
The calculation: price/earnings (P/E) ratio divided by
expected per-share earnings growth over the next year.

0.5o or less - Strong Buy
0.50 to 0.75 - Buy
0.75 to 1.00 - Hold
1.00 to 1.25 - Possible Sell
1.25 to 1.75 - Consider Shorting
Over 1.75 - Short/Sell