It´s almost comical to watch the herd of high profile Wall Street pundits get elated when only a week ago they were predicting doom. Today´s comments sound like this “With our global economists believing that this economic recovery is sustainable, we expect the current growth scare associated with this correction will pass,” or “Global economic growth, low interest rates, a “more robust” financial system and oil below $70 a barrel will help lift the U.K.’s FTSE 100 Index to 5,800 by the end of this year.” Or, “There’s a feeling that although there are issues out there, the sell-off has been overdone.” Or, “It’s been pretty brutal recently and the general expectation is that we should see things bounce from these levels, at least in the short term.” Or “I’m an optimist. The economic fundamentals are rather better than some suspect and that’s certainly coming through in terms of the corporate earnings numbers. Companies are demonstrating better profits than many people had dared anticipate.”
The reality is the same concerns the markets had last week are there now as Daniel Knuchel at AAM states, “The gains in the U.S. yesterday are helping sentiment but the questions remains how sustainable it is? We’ve seen a good technical rebound this week that may last for a few more days buy I expect the market to remain vulnerable. Fears over the debt level in Europe and how it will affect growth haven’t disappeared.” It´s also amusing to observe the love-hate relationship with mining stocks and commodities in general. China Aluminum Corp for example felt the pain of the ol Washington DC cliche, “one minute you are the toast of the town, the next minute your toast.” I always joke, “If you love a stock at 30, why don´t you love it even more at 20″. Anyway, you get the point. Steady we go. Stick to the plan. Buy the volatility when it dips below your average price per share. The companies are solid. The big macroeconomic picture is indeed stable, especially for emerging markets. Let´s just consider this market correction our version of basic training. It toughened us up and gave us more resolve.
The Utopians Are On The Other Side Of The Street
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