Thursday, July 10, 2008

Cav's stock market sentiment

As I warned last month, the market could retest March lows, and this week it's happened and then some.

The financial sector was once the largest slice of the large caps, and now it's only worth half of last year's value. It could fall quite a bit from here, as the credit crunch is still not over, but I continue to hypothesize that financials cannot infect the overall economy as much as some doomsayers predict. For instance, if financials halve again from here, it's ever-smaller weighting relative to the other sectors, and will have a proportionately dwindled impact.

I'm bullish on non-financials, but expecting the market to sell off further. Investors are too worried.

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