Obama is ready for a fight.........

March 1, 2009

Obama is ready for a fight. And some light reading


Well it is clear now the Obama administration does not care where equities pricing goes. It is also clear that the previous administration did care and tried to manipulate the market place several times with short selling bans on option expiration dates.


At the end of the day the stock market or the equity asset class is based on a companies current and future earnings. It seems like the market is saying firms will continue to make less money in the future, some from unemployment, reduced leverage etc……


Where do we go from here…. Most likely down further….. Most likely the rotation of the down side will now move to the technology space as the Nasdaq has not hit new lows, but the S&P 500 and the Dow have already been broken.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=djia&time=13&freq=2


Do I believe there will be more opportunities for the market to go up along the way. Sure I do…

I still believe investing is about knowing your time horizon and your ability to handle risk. I also believe that the risk/reward ratio has gotten materially better. But I do believe we will see the S&P 500 at the 600 level…. (most probably soon)


Did you watch 60 minutes last night?
http://www.cbsnews.com/video/watch/?id=4836980n

Did you miss Mr. Buffet’s apology? The greatest investor of all time.
http://www.berkshirehathaway.com/letters/2008ltr.pdf

Have you seen what has happened to the preferred stock market? Is this another dead market place for financial firms to finance their business?
http://www.minyanville.com/articles/index/a/21370

Mr Gross seems to think it could get a lot worse.
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2009/Investment+Outlook+Bill+Gross+March+2009+Hairy+Lips+Sink+Ships.htm