I Am Not All Doom and Gloom

Well the market was up today. Three cheers for that!! Then again consumer confidence reached a new record low, go figure. My sense is that we are (finally) on a bit of an Obama bounce. Some companies are actually beating some very dismal expectations, so that is helping a bit too. And there continues to be some promising signs on credit easing a bit. These are all good things. Might I add that the market has some excellent valuations on excellent companies that are likely at or near some of the best valuations or our lifetimes. By many measures, this is the best investment opportunity of a generation, or very close to it.

Mind you, this is not to say all is honky dory. The economy faces some major risks ahead and the market could go down substantially from here, creating even better investment opportunities. Nonetheless, calling a bottom is like catching a falling knife. Predicting a bottom has bankrupt many an individual. If you have a long term horizon, as in ten years plus, then look at good companies that will survive, as in have plenty of capital to make it through, and decide upon an entry point soon. I am reading The Intelligent Investor by Benjamin Graham, one of the best investment minds of modern times. I expect he is about to pop out of his grave to do some investing, given the current environment. The market right now is a once-in-a-lifetime opportunity. Yes, I think, and am predicting, things to get worse from here, but hell, I could be wrong, and even if I am right it makes little difference if you have a long term horizon.

Don’t mistake my doom-and-gloom as a statement that stocks are poorly valued now. A further downturn is built into most stocks, and it would take a real meltdown (which I am worried about still) to make purchases of good companies a bad move if you have a long term horizon. I will continue to call it as I see it, but do not mistake my dour statements as being totally pessimistic. I am still afraid, but with so many good minds working to fix this mess, I have to have hope they will find a way to fix it and the market will have a nice recovery. Mind you, I do not see it going back to where it was at its peak or anywhere close, nor should it. That was a debt driven, unsustainable, peak.

Disclosures: None