Stock Market Roller Coaster
Well, sorry I haven't posted in a few days, I was sick and then was trying to play catch up at work. Anyway, the stock market has definitely been on a roller coaster ride. Unfortunately, for the Own Every Stock Portfolio and investors long in the market, we seem to be falling more frequently than we are climbing. The government bailout of Freddie Mac and Fannie Mae helped buoy the market for a day only to be wiped out the following day. Today, Lehman reported a huge loss, but the market seemed to be glad to see any number to end all the speculation surrounding the stock. Lehman still has a lot more questions to answer, but at least a little bit of uncertainty surrounding the stock has been removed, if only to be replaced with bad news.
Another interesting, but not surprising, turn around in the Own Every Stock Portfolio has been the rapid decline of the basic materials stocks. At one point, some of these stocks were among the best performers in the portfolio, but last time I checked, all the stocks within this sector that I own, are now in the red. It remains to be seen if the sector will rebound from its big declines or whether a longer term trend based on weakening fundamentals has taken hold. Tomorrow, I hope to be back with some recent headlines and I will also try to give an update on the best and worst performers in the portfolio. Thanks for stopping by.
Another interesting, but not surprising, turn around in the Own Every Stock Portfolio has been the rapid decline of the basic materials stocks. At one point, some of these stocks were among the best performers in the portfolio, but last time I checked, all the stocks within this sector that I own, are now in the red. It remains to be seen if the sector will rebound from its big declines or whether a longer term trend based on weakening fundamentals has taken hold. Tomorrow, I hope to be back with some recent headlines and I will also try to give an update on the best and worst performers in the portfolio. Thanks for stopping by.
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Here’s our market view on American stock market for 10th October, 2008
The stock market has collapsed - since Sept. 19 the DJIA is down 25% and the S&P 500 is down 28% and down 42% from a year ago.
How can this happen so quickly and so dramatically when so many good things have occurred? Oil is down to $82 a barrel; interest rates are very low; the dollar is up; valuation levels are extremely attractive among many blue chip stocks.
What's the real problem? The problem that is killing the stock market is a lack of hope about the future.
Hope springs from optimism that is based on facts and history. Look at the history of America and really all of mankind. Life is full of setbacks and problems - that's just the deal. But this too shall pass, as all scary periods have.
Doomsayers have been around forever and their batting average is zero. Buying stock is based on hope - hope for the future. If one doesn't have hope, they shouldn't be in this business.
So what is the best service we, as professionals, can provide for our clients?
First, discuss the fact that we are dealing with serious problems but it is not at all like 1929. The Federal Reserve and the Treasury Department are doing many things to restore confidence in the financial system. There is global coordination in attacking the problem, which is lack of confidence.
Tell your clients to look at history of our great nation and what has happened since 1776 when we faced very serious problems. The stock market actually rose steadily about six months after Pearl Harbor and until the end of WWII even though the outcome was not at all clear for several years.
No one knows when the stock market will bottom and a new bull will commence. We do know that stocks and mutual funds offer the best values we have seen since Black Monday, Oct. 19, 1987.
Almost all Americans have hope about the future of our nation, but they need help to control their normal fears.
ThePowerStocks.com Team
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