At "A Dash" we are delighted with the early response to our "truthiness" inquiry. There are several excellent suggestions for further exploration.
Discovering widely-held beliefs where the evidence is scanty is a strong method for finding investment returns. The help has been excellent.
The next step is to consider possible investment catalysts. This is definitely a work in progress. We expect a barrage of negative earnings in the current quarter. We all know that the credit freeze in the post-Lehman period had a big effect. We also know that corporate executives, in the modern SOX era, are likely to be cautious with their outlooks. There is a universal conclusion that 2009 earnings estimates are too high, and there is no objective basis for refuting this idea.
We are working on a time line of catalysts. We actively solicit suggestions, whether bullish or bearish.
Here are some candidates:
- The SEC report on mark-to-market accounting, due on January 2nd. This might recommend reporting transparency, but some relief on the official asset calculation. Or it might not.
- Housing initiatives. The Treasury is hinting at a new plan to reduce mortgage rates. The Fed has already acted. We expect the market to be skeptical of both, so it may take some real evidence to change opinions.
- Corporate earnings. No one will believe anything from Q4, so if there is positive news, we are waiting until April -- at least.
Suggestions and help are most welcome.