Profits - Take Some!

Tyler Durden's picture

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

“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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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
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!

wcvarones's picture

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

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.

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.

BBullionaire's picture

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

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.



Lucius Cornelius Sulla's picture

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

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.

bullmarket's picture

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

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.

Bicycles and Beer's picture

Profits! Take them from someone else.

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.


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.

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.

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.