Preparing For A Crisis

September 12, 2011
	The briefing was updated yesterday, and can be found at The Briefing Room. Howard Marks of Oaktree recently wrote about simultaneous problems in the market and what happens: “Markets usually do a pretty good job of coping with problems one at a time. When one arises, analysts analyze and investors reach conclusions and calmly adjust their portfolios. But when there’s a confluence of negative events, the markets can become overwhelmed and lose their cool. Things that might be tolerable individually combine into an unfathomable mess whose extent and ramifications seem beyond analysis. Market crises are chaotic, not orderly, and the multiplicity and simultaneity of contributing causes play a big part in making them so.” As I have mentioned before, when the economy becomes fragile, just about anything can become a trigger.  So many countries are in crisis right now in Europe.  Take a look at the chart below from the St. Louis Fed.  The spike up on the far right shows foreign official and international accounts pouring money into the US Fed.  The amount is much greater than during the last credit crisis in 2008.   We know they aren't loading their money into the US Fed because they are getting a good return from interest.  They must feel there are going to be problems elsewhere they are trying to hide from.  What do they know that they aren't telling the rest of us?  These are huge institutional investors! John Mauldin, who writes a weekly newsletter to an audience of 2 million, said that people should be increasing cash within their portfolios and not buying long only mutual funds.  He believes you should  be using fund managers that are nimble, because "in the next crisis, opportunities to buy assets on the cheap will grow." Our entire objective at PivotPoint is to be exactly that. . . nimble.  When we take a losing position, get out of it quick so we only lose a little and wait for the next opportunity.  We want our entire portfolio intact and ready for the next opportunity to "buy assets on the cheap". Please go to the Briefing Room to see exactly what we think of the most recent developments in the market and what we are doing about it with YOUR portfolio. Have a great day!! John Norquay CEO PivotPoint Advisors		In order to view the graphs and charts in our newsletter, please click the link at the top of your email to "always show images from PivotPoint Advisors" Resources Check out our Youtube Channel  Like our FaceBook FAN Page We manage money inside 401k plans. Know anyone who may want to use us? Click "Forward to a friend" (immediately below) to share this newsletter with friends you think may appreciate our services. Forward to a Friend Twitter Subscribe to the Weekly Briefing Report Unsubscribe Update Subscription Preferences View Email In Browser