Andy Kessler’s November Prediction

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I buried an article last November and decided to dig it up. You remember November don’t you? That’s when the Market hit a multi-year low and it seemed as if Wall Street was on the edge of an Abyss. If you heeded Andy Kessler’s advice and ignored the Market for the last three months you would swear that you had not missed a thing, since we are right back near those lows again.

The Crosshairs Trader’s focus is not on predictions-for the Market or otherwise-since predicting the Market is much like predicting the weather: depending on the season you can be fairly accurate at predicting a 2-3 day forecast but three months out is pretty much anyone’s guess.  Andy Kessler, in a Wall Street opinion article dated November 20 (the actual low of the year), gave the following advice: IGNORE THE STOCK MARKET UNTIL FEBRUARY.  Now this is not the kind of advice that The Crosshairs Trader would heed since there has been plenty of trading opportunities (long and short) since November but for the average investor, the advice has been pretty much spot on. 

Mr Kessler, a former hedge-fund manager and author of “How We Got Here” (Collins, 2005), lists five reasons for his advice:

1) Tax loss selling

2) Mutual fund redemptions

3) Mutual fund cap-gain distributions

4) Hedge fund redemptions

5) Margin calls

I post this article just for entertainment purposes. We may revisit it again in March and see if the prediction still holds. 

TRADING IS WAR.  PREPARE YOUR WEAPONS.

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