Today's Perspective - Today we are greeted by the announcement by AMD of beating the street by 12 cents. Yesterday, Motorola beat the street by seven cents. Today, the premier carrier class vendor of ATM, FR, and VOIP trades for $35 and change. What is the common thread?
Wall Street does not have a clue when it comes to evaluations. How can the street's best analysts, who study these huge, long established company's every move and pull down an obscene amount of money, be so dumb? How? Because that is the beauty of the public trading institutions this country founded and the world looks to for guidance. It is completely arbitrary and nobody has a clue, THE WAY IT SHOULD BE! The Russian stock market is completely the opposite and is therefore worthless. All currencies trade based on the US dollar. All banks base their rates on the US Fed in conjunction with their currency exchange rates. Why? Because the integrity of the US system has yet to be compromised. When it is, global trading will reign chaos and wreak havoc with every financial instrument available. Who will we turn to? Japan? GB? Brazil? Puerto Rico?
The point you say? The point is trading is not based on rationality, it is merely investor confidence and perception. Investors love bull runs. Thats why some people actually pay to get run over them, both realistically and theoretically. The bull has run over us and we are merely trying to catch up to him now. Strong US earnings reports will once again establish the US as the guiding light that has been dimmed by lesser economies. This is by no means a bear. A bear brings inflation, higher interest rates and unemployment. See any signs of that anywhere? I here the 'D' word ALOT more than the 'I' word in most financial discussion forums these days. So all in all, this is undoubtedly a manifestation of the combination of fear brought on by losing the treasures of greed. It is ugly and not much fun, but the fundamentalist can look through this fog and see the light of value, growth, and most of all, profitability, the cornerstone to investor success. Fear not the walk through the valley of ignorance, be strong and confident and ye shall reap the fruits of due diligence! (Not bad eh?) GO ASND!!! |
