Robert,
Exactamundo!! hehe.. October is going to right ugly if my predictions hold true.
Then the issue is which sectors will recover first. I still say small caps since they have relatively little foreign exposure.
The other shoes have yet to fall in Latin America and Asia. Hopefully, they will hang on and the Fed will cut rates, but I still suspect this will be a temporary band-aid on the problem.
Foreign nations are up to their foreheads in debt (held by the US and other multinational banks), their currencies are growing weaker, commodity prices are getting cheaper providing them less revenue to pay those debts, and capital flight to the US $$ is undercutting their ability to stabilize their markets.
I fully expect a higher level of defaults in 1999 due to the psychological threat of Y2K (if there is going to be a IT disaster, the last thing I need is foreign indebtedness).
So in the end, I wonder if there will be much interest in holding any stocks in 1999. Just too much uncertainty out there, combined with the "certain uncertainty" of Y2K impacts on emerging markets.
Regards,
Ron |
