Greg,
I really spent some time thinking about your reasoning, conclusions, and factors affecting the possibility of a general market selloff.
I've concluded that you are more than likely correct, there WILL be another selloff, likely to the tune of a 20% whallop (hopefully not, but maybe a little more).
Earnings have been growing at 20% annually for a couple of years now, and that rate is going to slow down beginning in Q3, as numbers are compared to the past years stellar numbers.
Also, the core rate of inflation looks set to increase, despite the best efforts of everyone to hide this fact. The inflation increase, combined with the likely interest rate increase by Greenspan in August seems like a likely catalyst to fuel a selloff.
I'm not attempting to put a negative spin on anything here, simply making time to express my opinion we are due for another shakeout, and likely this time a pretty good one.
If I were to provide the recipe for investors to follow, it would be to cencentrate assets in issues with stellar earnings growth, expanding operating margins, and NO DEBT. Capitalization appears to be of little concern this go round, much of the attention is being placed on smaller companies, as long as they conform to these requirements.
As always, best of investing to all, and I will likely be trading, as well as going short on chubby issues if the above materializes. I'm not much of a shorter (or investor for that matter :o) but I'm getting a little better at recognizing the signs as I continue learning about investing.
Regards, JB |
