All,
We must now be deep in a new phase of this bear market. Heard a couple of folks on television yesterday that are publicly communicating they have given up on the NASDAQ. IMO, Janus buying MO and Berkshire is also an indication that this phase is in full swing. Is this going to generate a crowed trade in the stocks with names that people recognize? Some of the people that I am associated with have now sold most of their techs except they are still holding IBM. The names they have bought are Fred and Fran, MO, Starbucks, Nextel, HD, Best Buy, etc. Had some calls wondering if they should buy Medtronic. Their purchases have been at prices which is at the top of the current trading ranges for these stocks.
Don't know if these folks are a good sample of the population at large, but if this goes on for a while my Freddie leaps could be toast. <g>
A question I have is, what is going to happen for these stocks to get to fair value. One thought is American companies are up to their ears in debt and a credit crunch could cause some problems with well known names, "like bankruptcies". Some other thoughts are the consumer quits spending or the housing bubble busts because the unemployed walk away from their home payments. This current phase could take a couple of years to wind down.
Any thoughts out there?
Joan |
