Venk, do what you gotta do
positives in personal life, in people banding together
try to separate investing forecasts from hometime optimism
plenty of investors were putting a positive face on this spring
then even before NYCity attacks, in August things fell apart
the reality promised in spring had not materialized
you cant alter the reality in the world economy by willing it, by spinning it, or by ignoring it
we in the USA are a long way from Asia
the entire continent is in turmoil economically
Japan is in a financial death spiral
they hold about 20-30% of US Treasury debt
massive sales on their part could bring higher US rates
their govt has discontinued bailouts, kaput
South America is on the verge of serious defaults
the consequences will extend to Brazil and Mexico
Europe is slowing, altho not declining with any big momentum
but if you find 6-10% unemployment ok, then fine
their interest rates are almost twice what they should be
as long as rates stay high, dont expect econ recovery
you are free to find the best out there among stocks
we will get thru this tough period for sure as a nation
but the stock market has become an even more dangerous place
two critical facts have me alarmed and concerned now:
1. despite lower share prices, valuations are higher than a year ago, when compared against current and nearterm future earnings
2. despite slower sales and lower inventories, the inventory/sales ratio is still as high as a year ago
if you believe all these change from cheaper rates and some tax refunds, combined with a stimulus package worth less than $500 per adult citizen, then you are free to go bullish
the above two facts mean trouble going forward
reduced profits continue to sap capital budgets
what was your view in July ???
how are conditions better now ???
/ jim |
