It is obvious that as the quarterly earnings come out, not all companies will, to this time, have been affected equally by events in Asia. Any so-called expert on the subject, and by this I mean the steady parade of overpaid individuals who appear on CNBC to give their best guess as to what will occur, who claims in any way to be able to foresee what the impact of the crises have been to now, or will be in the months, or perhaps years ahead, is, as one of my old friends used to say... simply blowing smoke up your ass. (Pardon my French). If there was no chance for serious repurcussions, than I guess that the planeloads of financial representatives that have invaded the Far East would be totally unnecessary, and that they too must be overstating the ramifications of a widespread deflationary situation. Underestimating the current impact of the situation is more dangerous than taking a pollyanish attitude and saying that everyone is blowing things out of proporation. Circumstances like these have never occured before in what is now a globally linked economic society. The impact could last for years, or it could all be solved in another month, but to claim that one knows what will happen and when is simply empty words with no foundation. The best thing to do is to wait and see what happens, then react accordingly when things turn out good or bad for various sectors of the economy. The 4th quarter earnings will only reflect the earliest impact of the crisis anyway, what happens in the next 6 months will be reflective of a steadily deteriorating situation and thus will demonstrate a far greater affect of any problems that are being only slightly felt at this time. Don't be like Scarlett O'Hara, things will not be better in the morning simply by wishing them away. As far as the various experts and their opinions, they honestly do not know what is going to happen, and the investing public would be better served if they would simply say so instead of making all sorts of statements with no supportive factual basis or prior experience.
Bernie Kaplan |
