I spill a lot of digital ink pointing out potential investment risk to investors. As I have stated in the past, the reason I do this is because the media expends a great amount of effort to avoid such a discussion because it does not attract viewership/readership. (Also, since their advertisers are primarily Wall Street related firms – suggesting an individual carry more cash is not financially beneficial.)
However, there are two problems with my approach. Because I share my view of risk with you, I am considered a “bear.” Fair enough.  However, that moniker assumes that I am sitting in cash, hoarding gold and “beanie-weenies” and expecting an immediate demise of the known universe. However, that is hardly the case as a read of my weekly e-newsletter will show a long history of successfully navigating the ebbs and flows of the market.Â
For this reason, as I wrote recently, if I am a bear then I am an “almost fully invested bear.” However, that is the point of this weekend’s reading list. Recent market actions, the rapid decline in interest rates, earnings deterioration and plunging energy prices have all made me much less comfortable being long the market.
While the “buy and hold” crowd suggests this is all rubbish, it should be worth remembering that every single one of that group never saw the corrections in 2000 or 2008 until it was far too late.  Their only excuse was “no one could have seen it coming.” The truth is that many did see what was coming.
Paying attention to what is happening at the margin leads to an understanding of when the “tides” begin to shift. With the general complacency in the markets beginning to deteriorate and risk appetites receding, these have historically been predictors of corrections or worse.
This weekend I am heading to Vancouver to speak at a financial investment conference, so here is what I will be reading on the plane.
