Hi JT, welcome back.
I will adjust your pick, I figured you would change, but just wanted to get your name on there.
>>>The litmus test comes in the next two weeks, especially with earnings front, political cacophony, and interest rates bringing up the caboose <<<
I just don't see anything that will derail this caboose in the near term. The bad news is out of the way, and I think we will get earnings season run-up like last quarter.
Just because this thing is overvalued doesn't mean it will fall, it's been overvalued for over 2 years. The bulls don't think it's overvalued and JQ Public continues to put money in mutuals by rote. Wait for definate trend change before betting against this bull.
I think we have to watch interest rates and look to 3Q earnings prospects as potential problems.
I wrote a letter to Gail Dudack our WSW bear compadre and she wrote me back a nice letter with an artcle by Dr. Henry Kaufman, titled "The impact of structural changes on financial excesses"
It discusses the push to extreme financial leverage (highest consumer debt in history), the boom in mutual funds and money market funds (that investors have confused for guaranteed savings accounts), the popularity of complex financial derivatives, futures, forwards, swaps, options, etc (downfall of orange county was derivatives), emerging countrys credit markets have expanded from 500B to 2 trillion in 4 years.
I watched a TV taped program this weekend about the 20's, Henry Ford & Ford Motors were the shining example of American industry in that day. I saw incredible parallels between events at Ford Motor and Microsoft. I'll have more on this later.
See ya,
Bob |
