In more ways than one, cash is king. Aside from staying away from the risk of this market which is treacherous now for both long and shorts as the "non" invisible hand meddles with the markets on a nearly daily basis i.e.
90 new companies added to "no short" list in the US today, Australia completely banning short selling - this just creates TOO MUCH uncertainty. I've written over the past week how do you invest when you don't know the rules? They keep changing the rules and that causes me great unease. So what if I was short
General Motors (GM) Friday? It's just reaching a point it's become a circus and people are going to take their marbles and go home...
Anyhow, my other point on cash is this - in a market devoid of credit and quite frankly years of contracted credit ahead of us, cash will again be king. Balance sheets will matter again. And in the near term any debt is a
Sword of Damocles as all it takes is Moody's or S&P to downgrade your debt and you face a short selling attack (unless you are on the protected list of course!) which will cause the stock to lose 40% in 5 minutes. So perhaps the SEC can ban short selling on all stocks with >$1 of debt. That will solve all our problems. Yep.
What I'd like to ask
readers is to please email me any share buybacks you see over the coming weeks/months - specifically in smaller companies (say $10B in market cap or below)
Today, we had a bevy in the large caps -
Microsoft (MSFT),
Hewlett Packard (HPQ),
Sysco (SYY) and
Nike (NKE).
