Where is the stock market heading? Has the rally that started in early March been exhausted? These are the key questions on all investors’ minds as financial markets remain caught between the frantic actions of central banks to get the cogs of the credit system and economy turning again on the one hand, and a still shaky economic and corporate outlook on the other.

It is therefore no wonder that even so-called “pop analysis”, including some legendary axioms, is resorted to in a quest for direction. And besides “buy low and sell high” few other axioms are more widely propagated than “sell in May and go away”. A Google search revealed an astounding 127,000 items featuring this phrase.

As equities have seen a particularly strong six-week rally, followed by what looks like the start of a consolidation/retracement of some of the recent gains,

I will find myself in Dana Point, California over the next few days, attending a partners’ conference hosted by Rob Arnott’s Research Affiliates. (Our investment management company, Plexus Asset Management, has a licensing agreement with Research Affiliates for managing and distributing its enhanced Fundamental Index™ methodology in the Pan-African region.)

I am always thrilled about attending this event as it affords me the opportunity to meet with financial luminaries such as Peter Bernstein, Burton Malkiel, Harry Markowitz and Jack Treynor.

Posting will be slow while I am on the road and “Words” from the Wise” will take a break this coming Sunday (April 26). The normal blogging service will be resumed on my return to Cape Town by the middle of next week.

However, I will be “tweeting” regularly throughout my trip.

I attended a Richard Russell tribute dinner in San Diego on Saturday. This function, in honor of the 84-year old Russell’s 50 years as a newsletter writer, was attended by almost 500 people, including the likes of John Mauldin, Robert Precter, Ian McAvity, the Aden Sisters, Ivan Boesky, Bill Bonner, Bert Dohmen and a host of others.

There was a brief question and answer period. One visitor asked him what he would do if he was running the country. In classic Russell fashion, the venerable analyst answered, “I’d do nothing. I’d let it happen. I’d let the bear market do its work.”

For the rest, Aaron Task of Yahoo Finance, Tech Ticker pulled me aside for a short video interview and the paragraphs below are from his

This weekend my “daytime” job – executive chairman of Cape Town-based investment management firm, Plexus Asset Management – requires my undivided attention to put a very exciting deal to bed. The bad news for my readers is that time does not permit compiling an edition of “Words from the Wise” today.

It is not always easy to keep all the balls in the air, especially with increasing overseas travel, but the posts will still be forthcoming – perhaps just more slowly on occasion.

On the topic of deals, any private equity managers interested in hearing about attractive deals in South Africa and the rest of the African continent, please drop me a line as there are lucrative opportunities

Since hitting a peak on July 16, the meltdown in global stock markets has taken place with lightning speed. Given the fact that more than 10% (using the Dow Jones World Index as a proxy for global stocks) has already been wiped off investors’ scoreboards, the question invariably is how low can we go.

Has the Fed come to the rescue of markets with today’s cut of the discount window rate from 6.25% to 5.75%? But before getting stuck in analysis, let’s take a look a very useful diagram devised by my colleague Ryk de Klerk of Plexus Asset Management. The chart below summarizes the cause of the current global liquidity crisis and the eventual intervention by major central banks in an easy-to-understand manner.