Shaking the Decision Tree

One of the joys of the long Thanksgiving weekend is the beautiful fall weather. Cool crisp air, the smell of smoke drifting out from fireplaces and the last leaves falling from the trees. Among the maples and other hardwoods that have been lit up with color for the last month, one of my favorite trees is the decision tree. As all of us pundits debate the fiscal cliff, I have been studying the decision tree of outcomes, looking for insight into how to position my portfolio for protection against most of the projections.

Outcome 1: President Obama and Congress at an impasse, and the Budget Control Act measures go into effect. This is the best outcome for the country long-term, although of course it will cause a recession in 2013. Many say "we can't let this happen" – but neither could we let the fed funds rate go to 20% in 1981. After that economic shock stopped inflation dead in its tracks, the U.S. economy went on a 20-year boom that rivaled any of our best expansions. Right now, I am carrying a high cash balance and avoiding cyclicals to position for this outcome....249 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.