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7 comments:
All this "jawboning" is making me suspicious that something is up.
Great read over on Contrary Investor's June 2006 - Market Observations. - It concludes with this sentence - "Could Bernanke's "trial by fire" Fed Chairmanship initiation include a brush with stagflationary economic tendencies? We smell smoke."
http://www.contraryinvestor.com/mo.htm
OG
Yech. So everytime Berny hiccups we're going to see Dow -200 like this? Put a sock in it dude.
Not sure anything new was said today. The "press" reported first that Iran would not ship us oil if we bombed them. How long do you think it took them to figure that out? Secondly, the Helicopter statement. Oh! Was there anyone in the world that thought that he would NOT fight inflation, if present? The market was down because of the trigger happy 26 yr old portfolio managers over at Fidlelity.
George,
"...The market was down because of the trigger happy 26 yr old portfolio managers over at Fidlelity."
I get the gist, but would you care to elaborate? I tend to be of the mind set that I only want to listen to those market professionals who are old enough to have experienced the 70s!
The elaborative:
When I see no NEW news, but old tired worn out news, being blamed for a 200 point down day, I (imho) attribute it to the "ones" who run high turnover funds withOUT the experience of the seventies.
Of course, there could have been something going on today that we do not know about and "they" do...
but I do not think it was reported on CNBC...
I was not around in the 70's. But I here so many talk about how bad it was. If my research serves me, the small caps and foreign stocks did pretty well, like the past 6 yrs.
George's comments about 26 year olds running money is valid but it is always an issue for the market-that is inexperienced people making decisions.
On a side note, as I recall 26 was pretty good.
I 'lived through' the 70's but was not an active investor for most of it, not nearly active soon enough anyway. The Dow dropped 45% w/ Nasdaq down 60% by '74 but a number of foreign markets were even worse, Australia and Hong Kong for example (the Hang Seng was down almost 90% peak to trough by the fall of '74 IIRC). Bonds of course were down before '73 and so was most of the equity market: By '73 it was a two-tier market, mainly the "Nifty Fifty" and similar big names holding up the indexes, pretty much everything else below its previous high; then everyone went down for the count. Successful investments were still around if you were nimble and had sufficient access and cash but the equity markets as a whole didn't really recover for another eight years; I made a lot more money in real estate than I did in equities during that period.
Things have been pretty good for awhile now, it's hard to realize that from 1966 to 1982 the average buy-and-hold investor barely broke even in nominal terms and lost significantly in real, inflation adjusted terms. There are more tools and investing instruments available now and information is better too so that may even the odds somewhat but people need to be prepared to back off and wait or change markets when things aren't going as they expect.
That said I wouldn't be surprised to see another leg up here - lots of fear but not much capitulation - and the Fed may speak more softly to calm things down too (but I still think they're going to raise again by August).
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