What Will You Do If We Don't Crash?
There are plenty of companies that are acting very well despite the challenges faced by the general market.
Everywhere you look you can clearly see economic concerns. In a two-mile vicinity, I can see numerous housing projects on hold or the finished goods sitting empty. Yesterday, I filled up my tank for close to $100.00 after buying a gallon of milk that cost me close to $5.00. My friends in the banking system tell me it is still very hard to move any structured products and those in the mortgage business tell me that even when a housing deal closes, getting a prospective client financing takes a work of God. The FOMC continues to pump liquidity into our financial system and the U.S. Dollar seems to plummet day in and day out. Many bears even debate that investor optimism as measured by such things as margin interest and investor surveys are quite high, which will ultimately all combine to create one wretched market decline.
If you've missed Prof. Tatro's recent articles, check out Attitude Check: Where's Yours?, Overcoming the Fear Factor and Patience Is A Virtue.
Ironically, I don't disagree with any of the facts stated above. I can't stand paying what I pay at the gas pumps, or shelling out a small fortune for groceries, but I am not so sure I see the "optimism" that most talk of as measured by my own general discussions and research. It seems like each and every person I speak with, investor or not, is fearful of the future. While many will point to certain indicators that say most are optimistic, why is it that everyone I talk with or read is pessimistic? Am I just stumbling upon the small percentage that thinks the financial world as we know it will crumble?
As an investor, I must always be looking at all angles. I am always trying to create a plan regardless of what I feel will happen so that I can be prepared to act on what does happen. I answer to clients who demand results, if I don't produce, they will find someone who does, so I must remain open-minded at all times and prepared for anything.
So let me ask you, what is your plan if we don't crash? What are you going to do if we don't crumble and fall as so many are predicting? Will you continue to believe that Google (GOOG) can't possibly go any higher or will you find flaws in the numbers reported by Apple (AAPL)?
Why the irritating questions, you ask?
Well, last night I was discussing this very situation with a dear friend and investment manager who happens to be struggling on the year. For most of the year he fought the tape and made up solid ground in the summer drop however he thought it was just the beginning and not only kept the shorts, but pressed them. As we were discussing the landscape, and I couldn't disagree with any of the arguments he made about the economy, I simply asked in the end, "Well, what is your plan if the market doesn't fall?" He didn't quite understand what I was asking so I elaborated. "I agree with everything you are saying, and I also think the market will eventually reflect these issues, but what if it doesn't happen this year?" He hadn't even thought about the possibility.
Regardless of what you believe, I always encourage everyone to remain open-minded. There are plenty of companies that are acting very well despite the challenges faced by the general market. Intel (INTC) has recently reported a fantastic quarter and the stock is flirting with levels not seen in years. General Electric (GE) has recently been hit however only after reaching a level not seen since 2002. Drug maker Merck (MRK) is also breaking out of a level not seen since 2003.
My only goal is to keep you open-minded. Rather than being stuck to an absolute thought, why not consider all options? Use your speed and flexibility to move should you be incorrect, and don't be cemented into your beliefs. If there is one thing I have learned during my investment career it is that anything is possible.
Are you open to that?
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