ZF Capital

GO TO THE high-stakes tables in Vegas, and you’ll see experienced gamblers fold hand after hand, waiting for that opportune moment to finally put chips on the table. It’s the bachelor party and convention crowd that bets big on every deal of the cards. Is there any wonder they don’t last very long at the table?

The best stock traders are equally selective. There’s no Constitutional requirement that says you must be in the market. As I often point out, if you don’t love your positions — if you don’t feel as if you absolutely have to take them — there’s no real purpose in being in them to begin with. I’ve lost thousands of dollars over the years on investments I made because I was bored, looking for action, and dumb enough to waste money on something less than a high-probability trade. The stock market is a strange game. Sometimes the only winning move is not to play.

So while you were undoubtedly hoping I’ve come equipped with a list of must-own, low-float, about-to-double microcaps, I’m afraid I’ll have to disappoint. As has been my theme over the past few months, my fund’s biggest position these days is still cash. (more…)

AS A CLERK in Chicago’s commodities pits, I witnessed the wild chaos that erupted any time Greenspan coughed or an economic number was released. Throughout the day there were bodies, trading cards and even fists flying on the tightly packed floor. It’s the colorful tumult often shown as B-roll during market-themed TV reports.

What wasn’t shown — but what I remember just as clearly — were the many dull, quiet and downright boring periods when the market did nothing at all. Sometimes the floor was rock and roll; other times it was decidedly easy listening. No phones ringing off the hook, no screaming brokers and no volatile price action or limit moves that make headlines across the globe. Often, the market was dead. Traders would read the newspaper, nap in the lounge or step out for a drink at one of the neighborhood bars.

The same reality exists off the trading floor as well. From time to time, the markets become something to avoid rather than to trade. I do believe there’s always a bull market somewhere, and from my perspective right now it’s in capital preservation, patience and common sense. Now seems like the most opportune time to park a portfolio in a money-market fund and spend a week at Club Med. (more…)