"Don't Fight The Fed" & Related Phrases

"Don't fight the Fed" is a phrase that has been in existence for decades, and has been heard often, especially lately.

Other related phrases heard include "the Fed's got your back."  And, of course, "the Bernanke Put" and, while Greenspan was Federal Reserve Chairman, "the Greenspan Put."  Many of these phrases seem related to the "That won't be allowed to happen" mentality that I wrote of in the July 7, 2010 post.

Do these themes have credence, especially in today's economic and investment environments?  Of course, time will tell.  But, I continue to believe that placing undue faith in such themes is exceedingly hazardous, especially at this juncture.
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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1332.75 as this post is written

The Changing Investment Climate

Here is a link to an interesting White Paper from Guy Haselmann of Gregoire Capital, dated August 2009:

http://www.gregoirecapital.com/HF%20Outlook%208-09.pdf

I found it interesting because it discusses a variety of very important concepts such as investment flexibility, market dislocations, inflation vs. deflation, diversification, hedge fund operating risk, etc.



SPX at 1063.22 as this post is written

The "Buy and Hold" Philosophy

Here is a story from CNBC.com on September 23: "Buy-and-Hold Investing Makes A Return After Turbulent Year"

http://www.cnbc.com/id/32970487

I am not a fan of the "Buy and Hold" philosophy, although I will concede that it worked (very) well, generally speaking, during the 20th Century.

As far as the present and future is concerned, I wrote an article titled "Does Warren Buffett's Market Metric Still Apply?" that discusses various factors that are highly relevant to the "Buy and Hold" investment strategy.


SPX at 1044.38 as this post is written