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« ISM Signals Expanding Economy | Main | Problems with Housing Data »

June 02, 2009

Comments

investment property rental mortgage advice

I hope the largest industrial bankruptcy in history will serve as a lesson to the other companies.

-James

Mike C

To add to my previous thought, isn't what you describe versus what I propose the difference between a trend following/ride the momentum approach and a Steinhardt "variant perception" approach.

It would seem that both are ways to make money but timing is important in both cases. With the trend following approach you need to get the time to head out the exit door right (such as sell stocks in 2006/2007 at the peak of corporate profits) versus the variant perception you can't be too early (there were many housing bears who had to wait several years for the home price bubble to pop).

Mike C

Our own time horizon is one year or less. This viewpoint is widely shared by investors, so it is no use fighting it. Most people see the immediate economic impacts as positive, despite the pounding criticism from the punditry.

Perhaps it will all play out badly in a year or so. We will have time to adjust our positions as the story plays out.

First, good post. Made me think. Now let me take the opposite side here.

If most investors are focused on a year or less, then isn't the real opportunity in taking a much longer-term view that benefits when "investors" get "refocused" on where you already are?

Is it optimal to adjust positions as a story plays out or take a position way in advance and as Don Coxe says benefit when it goes from page 16 to page 1.

Patrick

I think the idea that the gov't is saving GM and Chrysler for a turnaround is a nice story. But that is all it is. I don't believe Obama is doing it with any hope these companies will ever come back. It is economic triage. To let them fail would be a huge shock. The Gov't is going to pay $30B to make an acute shock into a chronic pain. GM and Chrysler will fade away over years. I think AIG and Citi are also on long term wind downs. Not sure about BAC.

For the investor, it is one less nail in the coffin of the U.S. economy. If on March 9, the market was priced for collapse, there is less reason to expect that now. But we are still at where the market was priced on Jan. 1, but the future seems much more hopeful now than then.

arizona bankruptcy lawyer

I would be very hesitant to invest in a company owned partially by the feds. They do not know how to run general motors (not that the gm people do either).

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