Tora! Tora! Tora!
Kombanwa, Buru-san. O-genki desu ka?
I understand that you've pulled in your horns for a while, based upon your macro-level concerns about current events in worldwide financial markets, and especially those in Japan. Nevertheless, my personal view (curiously) remains about the same as that which I outlined in my "open kimono" post (no pun intended) on February 17th...
In light of the recent change in sentiment, however, I thought I would re-post my views and solicit your comments directly.
Care to shoot the apple off my head? Take your best shot. Just don't aim too low, OK? I'm kind of partial to these tusks, and I'd sure hate to lose one. <gg>
Best regards,
Razor
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"Happy Days? My Personal Views"
Aggie: Coy? Moi? Hey, it's my kimono, and no, you can't peek inside. LOL!
OK, OK, you twisted my arm. <gg>
First, let me start by saying that I don't think the NASDAQ is a very good proxy for the entire US economy as a whole. Don't forget that old saw that says the stock market has predicted 11 of the last 3 recessions. <g>
Second, I'll address your question directly by saying that I think the article made a number of great points. True, manufacturing is undoubtedly in a recession NOW. I see the ramifications of that every day in my consulting work. (I fly out on Monday morning to visit a manufacturing company that ran out of cash last week and issued final paychecks to employees on Friday. The company effectively drowned during the current downturn trying to service $20MM of asset-based financing. The bank's going to take a huge haircut on another airball loan. I suspect I will end up either selling the company under a liquidating Chapter 11 or simply turning over the reins to a Chapter 7 trustee for a straight liquidation. Not a pretty sight, but an increasingly common one on the front lines of the manufacturing recession that I find myself confronting on a daily basis.)
Third, I have to keep reminding myself that the US economy as a whole is mostly a service economy (80%), and not just a manufacturing economy (20%). Don't forget that entire sectors can go into recession without dragging down the entire economy (e.g., look at the oil patch back in 1998-99). As long as consumer confidence doesn't tank, IMHO, the US economy as a whole will no doubt slow down significantly, but probably not plunge into a nationwide recession.
Fourth, my personal belief is that the six interest rate increases last year significantly impacted overall demand, but high oil & gas prices really delivered the knock-out blow to the manufacturing sector.
Fifth, I also think that the uncertainty surrounding the US presidential elections significantly affected consumer confidence during the key Christmas holiday shopping season, and that psychological impact is showing up in todays' earnings reports, but that was really a non-recurring event, and consumer confidence is not in as much of a crisis as may have seemed apparent around New Years. (BTW, I don't think that this hypothesis has been given nearly enough debate so far, but probably had an enormous impact on recent economic reports.)
And last, but not least, I have to confess that I have an enormous amount of confidence in Greenspan's abilities to navigate this enormous battleship, the U.S.S. Economy.
So how do I expect this outlook to affect me personally, both from a business perspective and an investment perspective?
Well, from a business perspective, I hope Bullsky is right. (Sorry, folks, but if we go into a recession, I'm going to clean up on the consulting front.) But either way, I'm prepared to capitalize on either outcome from an investment perspective. I honestly believe that I can make money on my investments in 2001 by staying nimble and switch hitting when good opportunities present themselves. (I'm often wrong, but never in doubt! <g>)
One more thing that I should probably clarify -- although I don't think it will surprise anyone here -- is that I've switched to a much more active trading philosophy this year. I've probably made more trades in January 2001 alone than I did all of last year, but, hey, that's what the market has been giving me, and I'll be damned if I'm going to look a gift horse in the mouth. So far, it's been a highly profitable year to date.
Hope that sufficiently explains my own personal views.
Now, can I close my kimono? ;-)
Best regards,
Razor
Message 15370883 |
