Does this sound like a healthy market to you?
Yes, actually it does, except for the Fed's actions.
So old economy companies are dying. I don't remember the last time I went inside a Penney's or a Sears. There are many better competitors, and I don't mean internet commerce, I mean better brick and mortar competitors.
Phillip Morris? I can't remember how long ago I quit smoking.
Boston Scientific, Coca-Cola, Gillette, Hershey, Nucor, NIKE, Wendy?s International, PepsiCo, Berkshire Hathaway, Walt Disney, Banc One, Wells Fargo Bank, Hasbro, H&R Block, Compaq Computer, 3Com, Diebold, Delta Airlines, Caterpillar, Dun & Bradstreet, Texaco, Boeing, and Eastman Kodak
There's not a single company in that list that I would have bought over the last three years, with the exception of 3Com that I am buying now for Palm, not for 3Com.
The fact that those companies have been withering on the vine due to their inability to adapt to the new economy, or have made gambles on the wrong technology, does not bother me one bit. If Vick is concerned about a bear market because of these stocks, then bring it on.
I will get concerned if and when the new economy stocks go down and stay down for a year or more. Then we will be in a true bear market.
Unlike others who see AG as benign and even helpful, I am of the opinion that he is playing with fire and may burn the place down before he realizes it. If the Fed did nothing for the rest of the year, some old economy companies might be able to figure things out and get back on track. But by being proactive with rates, AG will cause a recession not only here but worldwide (anyone notice how banks are raising rates worldwide?), and we will be back to October 98. Then he will pump money in, cut rates, but he may have gone to the well once too often. |
