Things work a certain way.
This is our eleventh May at our cabin and one thing we can count on every year is that no matter how warm it might get in April it will get very cold and maybe even snow, like it is today (that picture is from this morning), sometime between May 10th and May 15th.
Invariably someone will make a comment in April about it being warm from there on out and it is always wrong. The cyclicality of this is very reliable.
There is an obvious parallel here with the bear phase of a stock market cycle. There are always feel good rallies in a bear that cause people to think it will be a bull from there on out and it is always wrong.
Of course this could be a first or maybe despite it quacking like a bear it is not, but there is nothing new about big lifts during bear markets.
2 comments:
It's likely going to be the price of raw materials that does for the stock market. Bernanke looks willing to attempt to inflate away the problems of debt and so is adding to inflationary pressures. Everybody is having top spend more on food, goods etc. But doesn't this just mean allocating your portfolio towards resources stocks and the commodities themselves?
And maybe infrastructure, what with all the building going on?
Nice picture -- are we "Gore-ing" Al?
I have a modest position in commodities (Jim Rogers' index - RJI), but I do not expect the bull to continue in that sector.
There comes a time when basic commodities will increase in price to the point of lower consumption, resulting in commodities chasing fewer users, or, government price controls such as those with rice in several Pacific Rim countries.
An overweight in commodities is not the best investment idea. It should be but a portion of a balanced portfolio.
T
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