Seeking Alpha by Adding Beta

As I predicted about DOW reaching 9000 by summer end  back in Apr, it did cross that milestone right in the middle of summer. So now what to expect ? It's kind of tricky situation - on one side, DOW had its best 2-week run since 2000. But then we know what followed. On other side, it is still 30% plus down from its high of 14000 in Oct 2007. Here are some of the macro-trends I am watching: Emerging stock markets have started getting into bubble territory with many of them up by 70-100%. Is economic recovery justify this or is this China govt fueled bubble ? Natural Gas prices are still 60% below their peaks so industrial demand has not really picked up significantly Companies are beating analyst forecasts by cutting costs and not by increasing revenues - this cannot sustain unless revenues pick up Consumers have started opening their wallets but that may be cyclical effect of rising stock market wealth. If stock market tanks again, consumer demand would vanish once more Summer is e...

What a difference week makes - last week things were pretty gloomy with markets tanking over 7-8% in previous 4 weeks. With unexpected good earnings from GS, INTC , IBM and JPM , things suddenly looks promising again. In one week, S&P is up by 7% and recovered almost all losses over previous 3-4 weeks. If good earnings streak continues next week, it may cross Jun 11 high. Even Government felt compelled to ignore the "bailout" plea from CIT - hope they are not making same mistake Paulson did in Sept 08 when he rejected bailout plea from Lehman. With summer mid-way, I am still hoping that my prediction of Dow hitting 9000 before labor day weekend would come true. However right now I have started looking past labor day weekend when dreaded months of Sept/Oct come - almost all crashes have come in these two months (except one which we saw in Mar 09). So we need to make the portfolios by adding some crash-proof strategies. One way to do is to rotate into stocks which are pa...

It has been exactly 2 years since much hyped Blackstone IPO at $31 which marked the peak of credit bubble. I myself got carried away in the hype and in fact bought into blackstone IPO only to have significant losses - since then I have learned my lessons not to believe in hype. So why am even writing and considering "private equity" companies again ? In last two years since BX IPO , much of the hype has been gone along with bubble time excesses. There are almost no private equity deals in last 12 months (as against at least one deal getting announced every Monday morning in 2006-2007). In a way this is good for PE industry so they can focus on their portfolio companies and make some real decisions to help them survive and thrive when economy recovers.  The flood of redemption seen 6 months back have slowed down considerably and in fact there are new funds being raised (albeit smaller in size). Many of the PE companies have significant "dry-powder" (aka cash re...