Thomas: You didn't ask me, but I'll take a stab at it anyway.
There is a sweet spot in bull markets when just about every thing goes up, except interest rate sensitive issues,such as banks utilities, bonds, etc. This is when the economy is cooking. When the economy starts to overheat, only commodities and the stocks tied to them go up, while the rest of the market tops out, and interest rates are then in a bear market. This process usually does not occur instantaneously.
My view, is that we are coming out of the "Dead Zone" and into the "Sweet Spot" with respect to industrial commodities. But we are obviously just at the beginning. The bond market, the utility averages, and now Buffet buying chemical stocks are clear indications the "Sweet Spot" is here or immanent. You may remember when Buffet was buying Salomon, American Express, etc. everybody thought he was nuts. Well, Warren outfoxed 'em all didn't he? He will again. |
