Friday, July 24, 2009
Is It Morning Again In America? Dow, Buffett Say So
One of the greatest political ads of all time may be ready to repeat itself, Obama-style.
Yes, the DOW is outperforming what almost anyone would have expected months ago when it was toiling near 6500. Warren Buffett is telling everyone "I told you so" about the stock market recovering up nearly 44% from its lows. And it looks like Obama won't get all his wishes, as health care reform seems to be on hold but the country is seeing improvement in overall GDP. Only about 10-15% of the stimulus money has been used so far, which means the economy may get a HUGE bump up/upside surprise in January of 2010.
I am politically neutral and prefer to stick with the facts...and while unemployment is soaring, the reality is that unemployment lags. Housing is likely to hit a bottom this fall. And the 2 year recession may end in December 2009. Not saying a double dip recession can't happen..in fact, it is likely to happen. But you should invest according to the facts, not according to your political beliefs or desire for any President to be proven wrong.
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http://www.financialsense.com/editorials/saxena/2009/0724.html
ReplyDeleteAnil suggested I comment, so here's what I wrote at my facebook page:
ReplyDeleteHmm. Well...I can tell you this: that Ford stock I bought when it was well under $2 a share is looking pretty good right now! :)
I just think in all honesty that macro-economics is way over the head of many of the people that like to think they should have an opinion. The economy will come back...if for no other reason because speculation to the downside went way to nuts...fueled by bone headed...not just "deregulation" but I'll say an almost criminal lack of oversight in key sectors. Regain confidence. Bang. Better economy...and all of that completely regardless of business fundamentals.
On the other hand...serious headwinds remain. People don't get that the whole health care thing is as much about what to do with the baby boomers as they become elderly. Don't like the current plan. Great. But you better come up with *something* or the current economic issues are a drop in the bucket.
So to hone my point, we can banter about like we're each Nobel laureates all we'd like but the fact is, at the broadest of scales most of us don't know "what's" going to happen for sure, or "why." I'm just glad we have a President focused on *these* issues instead of generating whole new issues probably deigned in part exactly to divert attention from that which should really have it (as the last administration did).
From a personal perspective I believe truly smart individuals trying to make money usually do it by becoming expert at some niche or some subset of the economy. In the stock market for example, there are many obvious opportunities out there for people that learn "how to know," right now this second more than ever because so many strong companies were taken down with the broader market. Anil, obviously you know way better than I do at this point that in Real Estate there is *always* a play that makes sense. Specialization and focus are the key to wealth from an individual's perspective...and little of success will have to do with arguing about macro-economic policy with a bunch of people on facebook or blogspot. When I argue on macro-economics it's because I feel a moral imperative to try to influence the world toward a compassionate, overtly caring direction. I would *never* be arguing on such topics as a means to protect my own assets or further my own interests; nothing could be more futile.
So bottom line...this article leads me to consider what people are looking at in the economy and why...and it really hits me that most are in the dark and don't even know it. Does that make me some genius? Of course not...but I acknowledge that lack of genius in myself and account for it in focusing more narrowly where my personal economics are concerned. That is what I would encourage on a topic like this one...