Danger, Will Robinson!

While I try not to be perpetually bullish or bearish, my partner keep urging me to read websites like http://www.prudentbear.com. I laugh and say “They’re always bearish.” But, as the saying goes, just because you’re paranoid doesn’t mean they’re not watching you.

I’m also never one to try and time the markets, and I have blind faith in the American way and capitalist system. But the odds of stocks, bonds and financial markets continueing on their merry way grow smaller with each month. Stocks and bonds are way long in the tooth, experiencing what must be their longest and most impressive bull markets in history.

Of course, as Jim Grant says, everyone “talks their book”. My book is money markets and “cash”, so I’m clearly biased towards safety and money market mutual funds. (Not that there’s anything wrong with that;-) While one shouldn’t time markets, one also should always be aware of the odds. Though you can beat them in the short-run, over time the house always wins.

The odds keep getting better for cash, and worse for long-term investments, particularly bonds. The Wall Street Journal writes today, “Long-Term Rate Rise Prompts Strategy Shift”  http://online.wsj.com/article/SB118230552514241477.html?mod=home_personal_journal_left and breaks out the tired old playbook that says extend maturities when rates pop up.  Nobody tells you what to do when rates keep going and going and going though….

While of course noone can predict the future (or if they could, they wouldn’t tell us), I’m feeling very good about being in the cash business. I have a feeling it’s about to get real popular here….