Midday Observations

  • While the near term direction of the market is tough, I have a hard time seeing how stocks go higher in the longer term.
  • What happens if one morning we wake up and Lehman finds a suitor? Would you want to be short for that?
  • I believe that the trade that has been killing hedge funds is now over (commodity stocks down, financial stocks up). However, I believe hedge fund's troubles are far from over.
  • Technology stocks have been getting killed as hedge funds unwind their positions. It looks like they are getting some breathing room today as well. I believe they should continue to outperform in the short term.
  • Why is it that every small business owner I talk to is having such a hard time but S&P earnings ex financial companies are holding in?
  • Fannie Mae and Freddie Mac are insolvent and in government hands. What can we trust?
  • I think in the next few years there will be a time when bargains are abundant in the stock market. However, no one will want to touch them because they have been burned so bad. The key is to have money when that time comes.

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