My Photo
Note: Jeff does not accept guest blog posts on A Dash of Insight.

For inquiries regarding advertising and republication, contact

Follow Jeff on Twitter!

Enter your email address:

Delivered by FeedBurner


  • Seeking Alpha
    Seeking Alpha Certified
  • AllTopSites
    Alltop, all the top stories
  • iStockAnalyst
Talk Markets
Forexpros Contributor
Copyright 2005-2014
All Rights Reserved

« The Economy: Problems and Solutions | Main | Economic Stimulus Plans and Progress »

January 15, 2008



Interesting read. I too believe the street has factored in a mild recession. If it doesnt happen, there will be some upside.

Best Wishes,

Mike C

"Those who wait for this optimistic look from companies will have waited too long."

Excellent point! And I completely agree. Stock price action discounts the future. It does NOT react to the present headlines. But IMO that cuts both ways, in terms of either improving fundamentals and declining fundamentals. If one waits for the "all clear" sign to go long, you'll miss alot of the upside. At the same time, it is potentially dangerous to ignore/discount what initial deterioration in stock price action might be saying.

"Each day brings new and redundant information, completely consistent with slowing GDP growth. The market responds, each time, as if this is fresh information."

So is the market "wrong"? Maybe, and then again maybe not. Here is what Richard Russell had to say the other day:

"The "experts" are now coming out of the woodwork. Predictions are filling the air like mosquitos on a hot summer night. "There'll be no recession." "There definitely will be a recession." "We're already in a recession." The fact is that it's all guesses and opinions. The market is a law of its own. As the Dow and the Transports break to lower levels, assuming that they do, the situation will become more dangerous. Personally, I've learned to put little stock in the predictions of experts or even the Wall Street professionals. ****I go with the market. I bow to the wisdom of the stock averages.****"

I added the asterisks. Interesting point we are at right now. What has the market already discounted? We'll find out in th coming months. In the meantime, for all the hand-wringing and teeth knashing going on with CNBC guests, the fact of the matter is the current decline is peanuts. We're down 10 to 12% on the major indices.

To steal from Random Roger, we are "down a little". Is this the mother of all buying opportunities in terms of the broad market, or this is just a temporary rest stop on the road to "down alot". Depending on how one answers that question, is the difference between aggressively deploying any cash reserves versus holding some cash or hedging long bets a bit.

The comments to this entry are closed.