stock bull, a read, i think it was on the big kahuna thread or the stock market bubble thread, where a government official stated how difficult it was for china not to devalue and that china was a paying a very high price. he also said that the current situation wasn't sustainable "forever." i'll try and find the link.
positives, which i believe are already more than priced in stocks already (at least the big caps, some small caps look CHEAP! however, cheap can get cheaper in a bad market environment.), are:
1. very low inflation (excluding asset inflation which is ROARING)
2. very high employment in light of #1 (i like to work ;-)
3. people are still buying right now - incredible consumer confidence.
4. some industries are FINALLY realizing they have SERIOUS problems and are taking more serious action to resolve them - however, solving these problems isn't easy.
5. interest rates are very low (related to #1).
my basic philosophy is that markets should discount danger signs, not reward zero expectation stocks ala amazon.
my hope is that the us economy keeps chugging along w/o a major disaster. this may mean 0 growth or small growth. i don't see 20-30% growth anymore. a slow down in growth at near record valuations is very hard for me to swallow. which is why i'm in value small caps that have become more and more of a value ;-) even though i'm long i'm prepared for more punishment ;-(
the irony is that almost every company except the 1990s version of the "nifty fifty" has been obliterated. bios down 65-70%. many, many decent small caps down 50-60%. lots of midcaps down 40%. the nifty 50 is down about 20%. so, are the fav stocks gonna catch up to everyone else or visa versa. with the winds of change swirling with tons of uncertainty, if nothing else, i see lots more risk than reward.
ironicly, i believe the brain dead big momo guys bid the market up to ridiculous levels - no analysis required, none offered. if those types begin selling, rationally or not, look out below. break that trend line and you can drop a long way... |
