Long Time No Post

I apologize for not posting for a long long time. I could say I have been busy at work (which is true) that I had a vacation (also true) or that I have had a lot of family things to attend to (also true), but the real final truth is I am a bit disenfranchised. I still firmly believe the economy is running on fumes, that the fundamentals are not there for a true recovery and that the world is burning off stimulus. A very big foot has kicked a very big can down the road. I am hesitant to talk about it more as to a certain extent our economic condition is what we believe. There is something to be said for public perception or attitude.

That, however, has its limits, as in fundamentals, and they have not changed to the positive. We still have high unemployment (especially if you take out the BLS birth/death adjustments that have been dead wrong for the past couple of years), we still have high debt, both on a personal level (it went up again last month) and overwhelmingly so on a public level (ask Greece, Italy, Ireland or pretty much any other government in the world), and we still have no good business plan. By business plan I mean no real good economic recovery plan. What exactly is this country (the U.S.) going to do to sustain itself for the next 5, 10, 15, 25 or 50 years I ask you?

And so the markets go up and up and up. I have no explanation. George Washington has some ideas (six of them) worth chewing on and I refer you to his discussion of same, but at the end of the day he agrees the market rise is not supported by fundamentals.

http://www.nakedcapitalism.com/2010/03/guest-post-6-theories-on-why-the-stock-market-has-rallied.html

And so my postings have been slim. Largely I have nothing really truly new to say. The damn fundamentals have really had little to no change - at least not in the positive direction - and I cannot explain the markets. So I am hesitant to keep banging the doom-and-gloom drum as for the past year that would have not reflected the market direction of roughly a 70% improvement in the market.

So here I sit waiting to start my three year old son's 529 account. I am with the rest of the crowd. Do I invest now and lose money if the market is inflated or wait and lose money by getting in even more late than I have? Is this hard to understand market still going up from here? Are we going to shoot up when the masses start to grow tired of sitting on the side-lines and pour in? Or are we in for a major correction? No one knows. I certainly do not know.

I take some solace in the fact that the current market rally has not been due much to the masses. To me this means that we - the people - have an understanding that the fundamentals are not there and we are waiting out a false rally. Those driving the market up - which has been driven or inspired largely by low volume after hours trading - have their own agenda (and perhaps a false one). And so I am sitting it out. I am staying on the side-lines for now. I am staying there with my son's 529, my retirement and - for the most part - my brokerage account (though here I look for select opportunities). I have been totally wrong on the market for a year. We will see. I still do not believe I am wrong on the fundamentals.

Disclosure: I have some equity positions and some put options.