DOW : Below 7000
Good way to start March madness. Now it is time to buy and read “Even Buffet isn’t perfect”, he is one of the reasons to sink DOW below 7000 mark. AIG is other reason for today’s melt down, they lost 60 billion dollars during Q4 2008, which means they lost each day 652 million dollars (I did count on thanksgiving/xmas holidays and 92 day per Q4 calculation). This is really hurts, now AIG is 77% government organization, U.S tax payers has significant amount of stake on AIG. Actually Credit Default Swap is unregulated $60-40 trillion industry hence losses from AIG are not surprising and more to come. The U.S government should concentrate on AIG and Citigroup for now, they are the one required special attention.
DOW now trades below 7000 which is 1997 level and S&P trades at 1996 level. The positive point of view is, we have once in a life time opportunity to buy stocks at 11 years backdated price. Imagine that we are in a time machine and that takes us to 1997 to buy as much as possible backdated priced stock. But the question is, can we wait more? So the time machine takes us to back to 1992 or 1988 or even 1982. It is very hard to predict and it perhaps stops here. Any way, this is lucrative market for long timers, especially technology stocks are really trading at low level, they are taking hit just because of they are in U.S stock exchange.
The consensus is, DOW could go down to 6400 because of series of divided cut from blue chip companies. Actually we shouldn’t obsess with day by day market fluctuation. Stock markets are leading indicator of economy health for foreseeable future. Now market trades with Q3-Q4 of 2009 expectation, hence it is clear that recovery is not at sight during 2009. But as soon as, spring started/after tax period, we can see some bull market, get ready for firecrackers folks.
As a side note, tomorrow is U2’s new album “No Line on the Horizon” release, enjoy the songs.
DOW now trades below 7000 which is 1997 level and S&P trades at 1996 level. The positive point of view is, we have once in a life time opportunity to buy stocks at 11 years backdated price. Imagine that we are in a time machine and that takes us to 1997 to buy as much as possible backdated priced stock. But the question is, can we wait more? So the time machine takes us to back to 1992 or 1988 or even 1982. It is very hard to predict and it perhaps stops here. Any way, this is lucrative market for long timers, especially technology stocks are really trading at low level, they are taking hit just because of they are in U.S stock exchange.
The consensus is, DOW could go down to 6400 because of series of divided cut from blue chip companies. Actually we shouldn’t obsess with day by day market fluctuation. Stock markets are leading indicator of economy health for foreseeable future. Now market trades with Q3-Q4 of 2009 expectation, hence it is clear that recovery is not at sight during 2009. But as soon as, spring started/after tax period, we can see some bull market, get ready for firecrackers folks.
As a side note, tomorrow is U2’s new album “No Line on the Horizon” release, enjoy the songs.
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