Shades of 1931

The stock market may be in for it's worst yearly loss since 1931. For those that don't know any history dates that was the Great Depression. Yikes!

I would like to say the worst is over, but experience has taught me that no one knows when the worst is over. Sentiment indicators such as VIX have reached high after high, and many thought that each high would be bottom. I am not convinced. Newsletter sentiment might be the straw in the wind, so watch that, if it makes a new low reading, so far it hasn't.

Value investors are hard pressed to read balance sheets and find assets that have sure value. There are a lot of items such as real estate that are difficult to put a ready liquidation value on in a fast moving market. Momentum traders are likely either short, or out, or broke--having already been washed out with mongo margin calls.

It isn't the worst time to be thinking of buying bit-by-bit for the long term, but it may be a lot longer than a person thinks it will be. If I were to do that, I would not use stop losses. Stops don't work too well for value investing. Cheap gets cheaper, and then cheaper still.

I'm still sitting this one out. I have zero trades for the November option expiration cycle. Given my trading style and the wild swings, it seems the wise decision. Like I sometimes quote Clint Eastwood, "a man has to know his limitations."