max: history suggests that an oil price shock and related recession is the most likely cause of death of a bull market. Drillers are cheap, maybe they are a best buy. So are microcap financials, and their earnings are screaming right now- little title and insurance companies, microcap brokerages, microcap S&Ls. I'm inclined to just move more cash into this sector, hedge it with a bit of cheap drilling stocks and gold, and trade techs. It just feels dangerous to be too much in cash right now, and believe me it's tough for a permabear to say this!
Money has lots of places to go: microcap financials, drillers, mining stocks, latin american stocks, healthcare stocks, a flood of new Chinese ADRs hitting the street soon, microcap specialty techs. The equitization of Europe could be just beginning. I do think there's a real possibility that the dollar is devalued against the Euro.
The pundits try to blame the market on the greed of the little guy in the street. I'd blame it on the greed of big business moguls who get paid on incentives to make the stock price go up, and pension managers who get paid on volume rather than quality. I have grave doubts that pension money will be there when I retire- I'm inclined to think that we'll have a pension funding crisis instead of a Social Security funds crisis in 25 years. The pensions are betting on growth in India and China to keep the Ponzi scheme going. |
