The good news is that stocks are cheap now. The bad news is they could get a lot cheaper.
The herd tends to overshoot to the upside as well as downside. But this is a cyclical business, not a secular trend.
UPDATE: While I think we are in the 8th inning of the stock market drop, this does not hold true for credit markets. Though $100 billion has been written down off the balance sheets of banks, I think there is at least another $100 billion to go. The financial sector will continue to be a drag on the bigger equity indices.
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