Joe, Long-termers should do fine with Asian stocks holding straight through the end of year, IMO.
As for reasons why I think we'll see a mini-Asian contagion. . . October has been historically a dangerous time for Asian markets. . . and I see little reason to think anything will differ this year. I am not certain as to why October is typically a difficult time for Asian markets, but suspect it has to do with an earnings cycle in the leading stocks.
I think we'll have an increase in earnings disappointments in the U.S in October as well. . . . and that is also speculation. . . . . drought, fires, sustained high oil prices, hurricanes, high cost of acquisitions, labor shortage and what not could all contribute. . But the primary reason I think we'll be hearing from CFOs of the leading tech bellweathers in October will be their "difficulty in executing" existing orders. . . due to the rapid development of technology and the increasing enthusiasm of sales/marketing departments.
"Take those orders. . .but don't make promises on delivery". .
As Lucent can attest, I believe that more and more great companies will be slipping into this downward spiraling hole, called "execution". It may be a "good" problem to have "too much demand", but it IS a problem nonetheless. . . and one that can quickly place a company into a condition of negative cashflow.
Even though Asian stocks have been working their way off the bottom, I don't think we've seen the end to their plight. But I would be a buyer should we get a steep Asian decline in October. Bottom-fishing long-termers shouldn't see much difference if this scenario holds. . . since the climb out of the hole through September should be roughly proportionate to any October dumps. . . so as a long-term investor in Asian stocks, I would pay this entire scenario little mind.
Asian contagion is nothing to sneeze at. . . .but only if you are a long-termer, IMO.
As for U.S. stocks. . . I think waters will get rougher before they get smoother.
Near-term bearish. . . long term VERY Bullish.
Rande Is |
