Saturday, October 25, 2008

Where Are The Critics of Speculation Now??

When oil was over $120 there were so many that were out blaming the speculators. Now that we are seeing massive moves to the downside no one cares. Speculation works both ways and there are many short oil and the mainstream media chooses to focus on something else. Fear sells best and titles like ECONOMIC CRISIS draw more viewers.

Everyone thought we were headed down 1000 pts on the Dow yesterday. I must admit that it looked bleak in the premarket. I wanted us to test 7900 and bounce hard. Now we are hearing those that say we haven't truly had capitulation yet and we are headed to the downside for a lot more pain. Earnings are getting hit, but at some point the market will lead us out of this mess. Stocks will turn up before the economy does that is for sure. I think we will start to make improvements in stabilization on Nov 5th regardless of who wins the election. We will have a much clearer picture of what will be facing us once a winner is declared.

People seem to be missing the fact that fuel prices are below where they were a year ago and corporate balance sheets for the most part are healthy. As investors we tend to think everyone had as bad management as did some of the failed companies. The reality is that many companies have been executing very well during these hard times and have actually improved their balance sheets. I like Sanofi---but in full disclosure I liked it at $47 when I bought it. I do think they have a great pipeline and will deliver results in any economy.

I will discuss many opportunities later---but right now have to go to my cousins wedding.

More later