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Profits - Take Some!

Tyler Durden's picture




 

Via Mark J. Grant, author of Out of the Box,

Profits
 
“Profits are an opinion of the moment; cash is a fact.”
 
                    -The Wizard
 
As we head into the last of this year and we confront various cliffs; fiscal and European, the threat of rising taxes for individuals and perhaps corporations should not be minimized. It may not be the tax rate for corporations that goes up but it may be new taxes that are appended upon banks, corporations or other business enterprises or sales of goods and services that could be raised. Since those in the White House and those in Congress have as much appreciation for our current situation as a porcupine does of advanced trigonometry; we should all realize that drivel and stupidity could come pouring forth from any legislation and take the time now to make some adjustments. In other words, my friends, don’t be an Ostrich and stick your head in the sand and pretend that it will all go away; a strategy doomed to failure as always.
 
“Profits on the exchange are the treasures of goblins. At one time they may be carbuncle stones, then coals, then diamonds, then flint stones, then morning dew, then tears.”
 
                         -Lope de Vega
 
Investment grade bonds have compressed and profits are up more than 20% this year. The stock market, quite irrationally but never the less, has climbed and escalated in many sectors and higher taxes are to the fore. My best advice of today is to stop and look at your portfolios and take some profits and re-invest the proceeds or take profits and keep cash to be re-invested after the first of the year when we have either bumbled our way out of our predicament or behaved badly and find ourselves in a morass with all of the markets rolling about on their backside. It makes no difference as to your viewpoint and it takes no socially charged adjectives to reach a correct opinion; our President wants more and increased social programs and he wants those with the money to pay for them which is a transference of wealth to affect anyone that is doing well for themselves. He also has borrowed far more than he should with a Fed that is an obvious supporter of his plans and our Congress is deadlocked in a classic struggle between those that have and those who do not and so the responses could be irrational as America confronts its fiscal cliff.
 
“It is a socialist idea that making profits is a vice; I consider the real vice is making losses.”
 
                 -Winston Churchill
 
Now you have one and one-half months to make preparations. Some of you always bemoan the fact that I predict out into the future and not for tomorrow. Perhaps you will appreciate this prediction more and the time that you have to make some rational changes in your portfolios. You have some time for prudent thinking and for good old common sense to take hold and whether equities or bonds; I think it will be the wise move to take some profits now and whether the money is re-invested or held in cash until we see how the elected have washed their hands I think it will be the right move, the smart move, to lock-up some profits now before the gadflies try to slip them into the national purse. Bank, money manager, trust department, pension fund, hedge fund, insurance company; the standard applies. Take some profits before year end and thank your lucky stars next year that you followed my advice.
 
“Nobody ever lost money taking a profit.”
 
                  -Bernard Baruch

 

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Wed, 11/14/2012 - 10:03 | 2979463 Quinvarius
Quinvarius's picture

No.

Wed, 11/14/2012 - 10:12 | 2979494 SheepDog-One
SheepDog-One's picture

Quin you still buyin the dip, hows that goin so far?

Wed, 11/14/2012 - 10:30 | 2979558 Quinvarius
Quinvarius's picture

Since I started doing it in 2009, after QE1 was announced, and all the people who don't understand how the markets work screamed sell, I have been doing great.

Markets move on easy money.  Enjoy your 150 point DOW dip sponsored by the bankers while you can.  If you remember, they pulled this same stunt at the very bottom then too.  Someday it will be time to sell.  ZIRP, twist, and endless QE says this is not the time.  Don't get Kaminskied. 

http://finviz.com/futures_charts.ashx?t=YM&p=w1

As you can see at the bottom, the same people says sell are loading the boat even as this dip barely registers on the chart.

Wed, 11/14/2012 - 11:12 | 2979687 homersimpson
homersimpson's picture

"ZIRP, twist, and endless QE says this is not the time." Whatever. Tell Japan that..

Wed, 11/14/2012 - 11:40 | 2979829 SheepDog-One
SheepDog-One's picture

LOL yea no doubt Homer...we'll see who is left with a chair when the music suddenly stops.

Wed, 11/14/2012 - 12:28 | 2980052 economics9698
economics9698's picture

"Our President wants more and increased social programs and he wants those with the money to pay for them which is a transference of wealth to affect anyone that is doing well for themselves." 

 

NWA is goona steal all he can while he can.

Wed, 11/14/2012 - 12:26 | 2980040 jeff montanye
jeff montanye's picture

and the dow dip is more like a thousand points.  so far.

Wed, 11/14/2012 - 12:30 | 2980074 economics9698
economics9698's picture

The BLS will seasonally adjust that upward.

Wed, 11/14/2012 - 11:39 | 2979826 SheepDog-One
SheepDog-One's picture

Comment screen cap-ed.

Wed, 11/14/2012 - 10:21 | 2979520 xtop23
xtop23's picture

Why no? if you were smart and rode the deflationary wave your year is made. Don't be stupid. Unless you have remarkable talent, you're far more likely to lose through the end of the year.

Wed, 11/14/2012 - 10:57 | 2979653 Quinvarius
Quinvarius's picture

I regret being the first post here on this thread.  LOL.

Lets just say, I am asset bullish on free money and let the market do the talking. 

Jim Grant has been shorting Treasury bonds forever now.  I have been saying he is wrong because there is no Treasury "market".  The Fed is printing money to set rates to where it wants rates.  Various people have opinions on this currency or that currency.  I have none because there is no currency "market".  All paper money is the same exact thing as long as CBs cooperate to set rates and Fed exchanges USD at whatever rate it sets.  Many people have been calling for a market crash since 2009.  I say no because every market crash has been a banking crisis and we are not going to have one while the entire system is geared to giving banks free money. 

I am not remarkable.  I am just not capable of self delusion.  Free money makes all assets rise and I don't try to find meaning in painted on squiggley lines when it is a waste of time.

Wed, 11/14/2012 - 11:07 | 2979675 xtop23
xtop23's picture

hah.

I went short USD early and took some lumps too ( like Grant not you ) Still booked 13% on the year, overall. I'm a med > long term guy anyway. I just don't have a large enough case of ADD I still like to get laid once in a while.

Wed, 11/14/2012 - 11:35 | 2979804 Iconoclast
Iconoclast's picture

You should have stopped at your first comment, your second simply confirms your ignorance and stupidity...you come across as a USA soccer Mom; doing a bit of day trading between picking up the kids and pilates classes...

Wed, 11/14/2012 - 11:52 | 2979878 xtop23
xtop23's picture

/shrug, I made money, unlike most of the muppets big guy. I'm content.

And oh yeah..............fuck you.

Wed, 11/14/2012 - 12:15 | 2979977 Iconoclast
Iconoclast's picture

my comment wasnt aimed at you...you sound (read) like you're clued up...

Wed, 11/14/2012 - 12:29 | 2980061 xtop23
xtop23's picture

Perils of posting from a cell phone. Clued, but far from perfect, and I AM a duffer when it comes to technicals at least. Must be a heavy flow day for me. I'll go change my pad : p 

 

Wed, 11/14/2012 - 16:10 | 2981224 Iconoclast
Iconoclast's picture

Peace brother, it was this bit of the original post that irked me; "Free money makes all assets rise and I don't try to find meaning in painted on squiggley lines when it is a waste of time." Kinda true but just so lacking in deep thought as to where that train is gonna de-couple and get wrecked

Wed, 11/14/2012 - 11:41 | 2979836 SheepDog-One
SheepDog-One's picture

Who cares Quin? I mean, you act as if gambling with rigged markets is the only game in town....thats just ridiculous.

Wed, 11/14/2012 - 12:13 | 2979966 A82EBA
A82EBA's picture

do you think 1500 +_ is the cap for the 3rd time for the S&P?

Wed, 11/14/2012 - 18:33 | 2981872 Papasmurf
Papasmurf's picture

Quinvarious:  I am not remarkable.  I am just not capable of self delusion.

 

That was one of the most self delusional thoughts you could have.

Wed, 11/14/2012 - 10:04 | 2979464 GetZeeGold
GetZeeGold's picture

 

 

Take anythisg that isn't nailed down....word is taxes are going up.

Wed, 11/14/2012 - 10:59 | 2979656 Zero Govt
Zero Govt's picture

Yep, so don't sit there like a stuffed turkey over Christmas waiting to get eaten alive

Stop Paying Tax ...you stuff them or they stuff you.

...there's a no-brainer to vote on.

Wed, 11/14/2012 - 10:03 | 2979465 eclectic syncretist
eclectic syncretist's picture

"Should government refrain from regulation (taxation), the worthlessness of the money (credits) becomes apparent and the fraud can no longer be concealed." -- John Maynard Keynes, "Consequences of Peace."

This may be the only worthwhile thing the current us adminstration accomplishes, a stealth unveiling of the fraud of fiat.

Wed, 11/14/2012 - 10:17 | 2979508 LawsofPhysics
LawsofPhysics's picture

The earth is awash with fiat/fraud.  Hedge accordingly.

Wed, 11/14/2012 - 10:52 | 2979632 new game
new game's picture

got gold, s and w and silver?

what are you wait for?

the price in fiat will rise accordingly.

hedge accordingly...

tick, tick...

Wed, 11/14/2012 - 11:09 | 2979680 LawsofPhysics
LawsofPhysics's picture

it's a bit more complicated.  I didn't junk you, but in general the true cost of capital creation is about to be reset by the world market, no matter what the political puppets do or don't do.  The Federal Reserve (a private banking cartel) is losing it's grip on interest rates.  The real question for americans is what this cartel will decide to do with their property and assets.

Wed, 11/14/2012 - 10:03 | 2979466 youngman
youngman's picture

If you wait..you lose...15% now on a 90% value...vs 15% later on a 70% value...

Wed, 11/14/2012 - 10:45 | 2979614 Urban Redneck
Urban Redneck's picture

depends on the investment vehicle

for a truly ugly break-even case look at the entirely possible (if not probable)

15% now 43% later

Ex Inflation, $100,000 in profit now, would require over $197,000 in profit after Jan 1, JUST TO BREAK EVEN

Wed, 11/14/2012 - 10:09 | 2979481 jmcadg
jmcadg's picture

Take paper profits, reinvest in physical assets. 

Sounds prudent to me.

Wed, 11/14/2012 - 11:38 | 2979818 Iconoclast
Iconoclast's picture

Certainly explains why the UK (London) has seen rampant house price inflation at the very top. Flight money and it's 'what the clever people do'; get into anything physical as an asset. 

Wed, 11/14/2012 - 10:11 | 2979487 BBullionaire
BBullionaire's picture

thats ok for the paper traders but there's no way I'm digging up my bullion and selling it at $1720

http://bulletsbeansandbullion.blogspot.co.uk/

Wed, 11/14/2012 - 10:17 | 2979506 LongSoupLine
LongSoupLine's picture

And i'm not diving to the bottom of the lake for my silver.

Wed, 11/14/2012 - 10:29 | 2979551 fuu
fuu's picture

I got you covered boss.

Wed, 11/14/2012 - 10:11 | 2979488 SheepDog-One
SheepDog-One's picture

Better 'take profits' now while the last 'Greater Fool' out there the FED is still buying...may not be the case tomorrow! 

Wed, 11/14/2012 - 10:37 | 2979584 DOT
DOT's picture

The door to the circle jerk room may be closed and locked today.  The PDs, Treasury, and the Fed are now forming an exclusive threesome.

Wed, 11/14/2012 - 11:03 | 2979665 peekcrackers
peekcrackers's picture

Lets call it what it really is ... Better take the tax payers paper before there are no tax pay's left

Wed, 11/14/2012 - 10:12 | 2979492 Intelligence_In...
Intelligence_Insulter's picture

These social programs have got to go, WE DON'T HAVE THE MONEY FOR THEM. This is fiscal insanity.....the fiscal cliff looms...

Wed, 11/14/2012 - 10:15 | 2979501 LawsofPhysics
LawsofPhysics's picture

No more bailouts, FOR ANY PERSON/CORPORATION!!!!!!!!  

Wed, 11/14/2012 - 10:18 | 2979510 eclectic syncretist
eclectic syncretist's picture

Correction, we have all the money you can imagine.  The sooner the government borrows to the point that everyone realizes the fraud represented by the existence of the Federal Reserve, the sooner we can move on to a more fair way of life.

Wed, 11/14/2012 - 10:29 | 2979553 toomanyfakecons...
toomanyfakeconservatives's picture

I recently overheard the butcher, the baker, and the candlestick maker are bitching about the FED at my local pizza shop. Knowledge is speading. Revolution is in the air.

Wed, 11/14/2012 - 12:26 | 2980044 A82EBA
A82EBA's picture

51% of voters disagree

Wed, 11/14/2012 - 10:13 | 2979496 buzzsaw99
buzzsaw99's picture

Yeah, steal from pension funds, nothing wrong with taking a little profit.

Wed, 11/14/2012 - 10:16 | 2979505 BBullionaire
BBullionaire's picture

yeah take someone else's profits even better

Wed, 11/14/2012 - 10:21 | 2979523 buzzsaw99
buzzsaw99's picture

work that ponzi boyz, WORK IT! it's all in the hips, it's all in the hips...

http://www.youtube.com/watch?v=7PbRZ5QMAs0

Wed, 11/14/2012 - 10:13 | 2979497 LawsofPhysics
LawsofPhysics's picture

Take profits, buy physical - fixed.

Wed, 11/14/2012 - 11:05 | 2979674 peekcrackers
peekcrackers's picture

right on Law

Fixed 10 fold ... not only in sound money ..in sound ethics .

 

 

Wed, 11/14/2012 - 10:15 | 2979500 Jason T
Jason T's picture

invest in a wood burning stove. 

Wed, 11/14/2012 - 10:18 | 2979513 Manthong
Manthong's picture

Stack cow chips.

Wed, 11/14/2012 - 10:21 | 2979521 toomanyfakecons...
toomanyfakeconservatives's picture

She won't allow me to operate one at the present time, so I'm storing one away along with kerosene heaters, lamps, and oodles of kerosene.

Wed, 11/14/2012 - 10:25 | 2979536 BBullionaire
Wed, 11/14/2012 - 12:31 | 2980075 Shizzmoney
Shizzmoney's picture

I don't need the handouts to "buy" stuff.....I just do what they do in Hungary, and burn the money to keep warm:

Hungarians burn money to keep warm http://www.youtube.com/watch?v=HW5GzwvnNsI
Wed, 11/14/2012 - 10:18 | 2979512 toomanyfakecons...
toomanyfakeconservatives's picture

Profits... when the time comes, I damn sure won't be selling (or bartering) my stashes of ammo, booze, and canned chicken at cost!

Wed, 11/14/2012 - 10:26 | 2979544 BBullionaire
BBullionaire's picture

I've got a blog for you:

http://bulletsbeansandbullion.blogspot.co.uk/

 

enjoy

Wed, 11/14/2012 - 10:19 | 2979516 wcvarones
wcvarones's picture

Take some profits and hold it in what? Bernanke Fun Bucks?

Wed, 11/14/2012 - 10:23 | 2979528 firstdivision
firstdivision's picture

the Fed has done such a supurb job policing the financial markets, that we think they should oversee more of it.  Sounds perfectly sound to me.

http://www.bloomberg.com/news/2012-11-13/geithner-steps-up-pressure-to-make-money-funds-safer.html

Wed, 11/14/2012 - 10:24 | 2979529 fonzannoon
fonzannoon's picture

Hmm the water looks enticing today. Euro up, SPY up, even facebook holding it's own. Yes....yes....perhaps I will just put my feet in, those fish are not piranha out there right? The Vix is down, well damn if that is not a green light. What to buy? Ther mortgage reits? Apple? CNBS is playing rap music while they pitch so many companies I can't keep up. I better make a list and get started.

Wed, 11/14/2012 - 10:30 | 2979556 BBullionaire
BBullionaire's picture

go on. All in on emini with a 5 pip stop!

Wed, 11/14/2012 - 10:27 | 2979549 orangegeek
orangegeek's picture

Before we all get into a tizzy, remember the US Dollar is the currency for global trade - over 60% of it.  The US Dollar is 93.1% weighted against the Euro, Yen, Pound and C-Dollar.  All four of these have peaked.

 

And the US Dollar has bottomed.

 

http://bullandbearmash.com/chart/dollar-daily-today/

 

 

Wed, 11/14/2012 - 10:29 | 2979555 xtop23
xtop23's picture

LOL

Wed, 11/14/2012 - 10:28 | 2979550 Lucius Corneliu...
Lucius Cornelius Sulla's picture

The people have spoken.  The shake-down is coming.

Wed, 11/14/2012 - 10:30 | 2979560 DOT
DOT's picture

Will be watching Treasury soak up all of the Feds liquidity injection today. No more help for the equity markets, Qex is now for the Washington cabal exclusively.

Wed, 11/14/2012 - 10:44 | 2979609 bullmarket
bullmarket's picture

How could you have profits by listening to this site. Everyday is the same -SELLLLLL!!!!

Wed, 11/14/2012 - 11:04 | 2979671 De minimus
De minimus's picture

And what part of that strategy don't you understand, given the circumstances?

By all means you should buy, if you are connected in a timely manner to those running things now.

Wed, 11/14/2012 - 10:51 | 2979628 Bicycles and Beer
Bicycles and Beer's picture

Profits! Take them from someone else.

Wed, 11/14/2012 - 11:10 | 2979685 SmoothCoolSmoke
SmoothCoolSmoke's picture

Prudent advice for sure.  But Mr. Grant seems willing to ignore the well proven power of the Kick of the Can. Is he right this time?  We'll see.  But I predict the Banksters and their stooges in Congress/WH will find some way..... because they have the ability to RE-WRITE THE RULES OF THE GAME.

But maybe it will all come crashing down......and maybe the next vote by the Greeks is the one that finally screws the Banksters.....maybe.

I will say this....Mr, Grant would look a lot more convincing if his advice was to get short, rather than just take profits.

 

Wed, 11/14/2012 - 11:30 | 2979779 SMG
SMG's picture

Yea but maybe he's not saying short because he's not 100% sure.  Ah, if only the central planners would let us in on the plan.

Wed, 11/14/2012 - 11:52 | 2979876 jmcadg
jmcadg's picture

Wait too long and you may find no physical available - at any price! 

A rising QE tide and all that - but you've got to be on the right boat.

Wed, 11/14/2012 - 12:36 | 2980100 The Bernank
The Bernank's picture

While the potential for fiscal changes in January is concerning, the markets will remain largely unaffected and therefore investor confidence would remain high.  The Federal Reserve stands ready to intervene if necessary to ensure stability in the markets, thus any profit-taking may be ill-advised at this time.  

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