Rate Scares Are Ruling the Market

 | Nov 05, 2013 | 11:01 AM EST  | Comments
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Stock quotes in this article:

regn

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tsla

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TLT

We are back in rate-scare territory, and it is wreaking havoc with the entire market. We've seen this movie before. We know that only rates and Washington have taken on this bull and won some battles -- certainly not the war -- and it is important to remember that while rates do matter, you have to be ready when they overshoot to be able to buy.

Does that mean you should sell the highest-multiple stocks out there? I think that's too glib, but it is exactly what happened last time. We literally saw those stocks crumble.

Given that Regeneron (REGN) is having a terrific day and the CEO is on "Mad Money" tonight, let's choose that as a company that not only was doing well but doing far better than expected. But what did it do when rates ran up last time? How about go from $282 to $217? Mind you, that's with no diminution to earnings whatsoever.

The power of rates to stop a juggernaut even extends to Tesla Motors (TSLA), which has been up huge and has now reversed. If you can get Tesla, you can get any stock, although I am sure some would say that it is coming down because of profit-taking ahead of the quarter.

What matters is that we get back on the iShares 20-Year-Plus Treasury ETF (TLT) watch. It's what is calling the tune today, and it has to be respected. 

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