About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Friday, December 05, 2008

Stock Market Comment

Americans love irony and I am no exception. And so with the all
the seriously bad economic news of recent weeks, the stock
market is trying to steady if not rally. It is a discounting
mechanism and the crash that started over two months ago
has correctly foretold the bad news emanating forth. So, I have
been amused this week by the thought that since the economy
has moved to the cusp of peril (See comments in earlier post),
wouldn't it be something if the market decided to hold off on a
rapid pursuit lower to see if the US and the rest of the major
economies are actually going to go over the cliff into the abyss
or whether we have a deep but managble recession to contend
with. Look, it would be unusual if such a serious economic
situation did not start with a bear market that lasted a good
16 -17 months and which carried into 2009. Moreover, after all
the carnage, now might be a good time for investors to pause to
decide whether all economic hell is about to break loose or not.
This is especially so with a new president coming on board, a
strong congressional majority in hand and a thumbs up from
voters to try and forcibly stimulate the economy and perhaps
massively so. And of course there is the issue, prevalent in
recessions since WW2, that the system has its own self correcting
mechanisms. So why not spend the holidays mulling whether
the wolf is really at the door?

I have had many more good hunches than bad over the years.
But I have had enough bad ones not to trust them but to tend to
the trading and investing disciplines instead and save the hunches
for conversation over drinks. At any rate, I thought I would
pass this little piece of irony along...

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