Calling out the market bottom or bottom of a individual stock is ignorance

Mar.26, 2008 in Market Outlook

Only history will tell us this. Calling bottoms is very very hard. It is much easier to call market tops - at least in my 19 years of professional market experience.

The reason why is there is psychology at play where we don’t know how much people will panic at the bottom.

If you are looking to buy, it depends on your risk tolerance, time horizon, and over all financial objectives.

If you are looking 10+ years out and for long term growth, I would be dollar cost averaging into the S&P 500 Index.

I would also do this in a Roth IRA.

Personally, I think it is funny at all the TV talkers trying to prop up the market every day.

I think there is some improvement, but it is not over yet. If this were true, we would have the shortest bear market in history with the 2nd largest credit crisis since the Great Depression and we did all this with no recession? That just doesn’t add up for me.

Also note:
Take a look at the terms of the JPM BSC deal. JPM is borrowing $29B from the FED for BSC’s currently bad real estate loans. The FED made this loan at 2 1/2% (somewhat adjustable - little tricky here), but the life of the loan is 10 years. (Reported CNBC Fast Money TV 03-21-2008)

To me, this says that JPM will need up to 10 years to turn around the bad loans, and some will default. The implication is that the real estate market may not turn around fully for up to 10 years.

Did you like this? If so, please bookmark it,