All good points, heinz. And you may very well be right. I may be early. But I look at the highest quality techs, and how much (and how quickly) they bounce back when sentiment improves slightly. I don't want to be late to the party. The semi and semi-equips and communications equipment stocks all go up 5-10% on days the market rallies. It would be very easy to hesitate, wait for clear signs that it's safe to invest again, and miss the first 40% move off the bottom in these stocks.
I agree, about all the wishful thinking re interest rates. I've poured scorn, over and over, on the "this is the last one" statements we've heard at Fed meeting-times since 6/99. It's different now :) The next raise will be the 7th , and the election is only a few months away, and rising interest rates (especially in lower-quality loans) are starting to slow economic activity. Several mobile home builders are being pushed to the wall, because banks have just stopped lending to MH buyers, or severely raised lending standards, in addition to raising mortgage rates. At the lowest end of the housing market, there is clear oversupply.
Yes, the S&P 500 is higher than in 6/99. But so are profits. In many of the techs, the entire parabolic euphoric rise (from 9/99 on) has been given back.
My guess is 1/2% more in June, and that's it.
Would you like to venture a guess as to what the Fed funds rate will be by the time they're done? You think 7 1/2%, 8% is what it'll take? |
