Time to Nibble or wait some more

If I Had My Way, We Should Be Selling All The BanksThe logic is simple. DSP and CS claim we will see negative growth in the 2nd and 3rd Quarters of CY08, with US sinking into recession and not recovering till end CY09. So whatever State Owned Banks and others finance, will end up into NPAs in 2 years from now..We should get rid of brokerages, and banks..and just wait.Please don’t get carried away in euphoria when the market jumps 200 points. Forget about “buying the dips” that I guarantee will follow. Don’t blindly go bargain- hunting. And whatever you do, don’t fall for the tired old refrain of “value investing.” There’s very little in the way of proven value out there.Not in a world where one trader can lose $7.2 billion for a single banking institution. And not in a world where Citigroup can lose $30 billion in the subprime mess. The world of finance is very, very murky now. And if you stick your neck out just a little too far, it’s likely to get chopped off! Now’s not the time to take chances. Now’s the time for a safety first strategy that will actually build your wealth 30%-40% over the next year — while many other investors lose their shirts, instead.Uncle Ben and the Federal Reserve cut interest rates by 75 basis points on January 22nd. Then they followed that up with a 50-basis-point cut on January 30th.And that left many investors wondering if these moves were a sign of wisdom… or a sign of desperation in acknowledging that things may be even worse than they seem.Frankly, a few rate cuts and a scolding from the central bank is NOT going to right this sinking ship. What we’re seeing is the unwinding of the Great Financial Mirage of the 21st century — trillions of dollars’ worth of bank profits that turned out not to be profits at all.It was all a mirage. All smoke-and-mirrors. And before this crisis ends, we have another $1 TRILLION, or so, to add on this subprime funeral pyre:Up to $250 billion in “credit default swap” paper gone bad Up to $200 billion of bad home-equity paper Another $150 billion in bad subprime paper $100-$200 billion in bad credit card debt $100 billion in bad auto loans $100 billion in bad student loans $250 billion in bad corporate high-yield bonds. The Fed is doing everything in its power to avoid this trillion-dollar meltdown. But there’s no telling today — and there won’t be for months — whether or not they’ll be able to succeed.Play defense, raise cash and nibble This isn’t just guesswork. We spent a lot of time crunching the above numbers, and yes, it looks exactly that bad.What’s more, our own independent research, shows a dramatic economic slowdown.Consumers, as you might expect, are cutting back in a big way. With home equity gone, the jobless rate rising, wages stagnant, and credit-card debt high, consumers finally are “tapped out.”But our research also clearly shows another insidious blow to our economy. Businesses are scared. They’re not hiring, and even more importantly, they’re not spending. They’re clearly taking defensive measures to ride this thing out.And so should you.Our strategy is based on our belief — supported by decades of history — that we will revisit the mid-January lows at least once. And perhaps two or three times, before we finally put a sound bottom in.So this is no time to get overly aggressive.It’s time to raise cash — join us to learn where that cash should come from. There are dozens of big-name stocks — even entire stock sectors — you must avoid now.It’s time to nibble. . So even as the market searches for that final bottom, we will be nibbling at great secular growth stocks. That’s the easiest way I know to near-automatically double your money when the economy and markets recover.These are the top-line growth companies in the world. Dominant leaders that are clearly positioned in the best global markets. Unless you believe the world is coming to an end, you must own them.Earlier I said that “there’s very little of proven value out there.” But after the recent decline, there are certainly pockets of opportunity where you will strike your gold. You should be nibbling now.And please remember, it’s also time to play a little defense.