The problem with being smart is knowing just how precarious the situation is. For all the noise and rabble rousing going on, and I plead guilty to being part of it, the truth is this: we are living in economically dangerous times and success is by no means certain. That's not a scare tactic or headline mongering on my part. It's just the way things are and it's nothing I haven't told you before now.
But being smart and having one US dollar isn't worth a Diet Coke in Canada these days. We need someone to put their gray matter to work by shining light on the financial bogeyman and helping us devise a plan to fight it. Which is exactly why Breakout welcomed bonafide smart-guy Michael Yoshikami, Founder & CEO of YCMNet Advisors.
Yoshikami has been watching, as opposed to buying, bank stocks for a while now. Obviously question one for him is whether or not he's buying them during today's harrowing sell-off. The short answer is no. The reason why is both honest and concerning. "We have too much fear right now," Yoshikami told me with incongruous calm. "There's too much contagion risk. There's too much drama coming out of Europe."
Yoshikami is long one bank stock, Citigoup (C) (I told you he was smart, not perfect). He's not buying anymore until... well, that brings us back to the precarious nature of the global economic situation.
At the moment it's extremely difficult to figure out exactly how this plays out in a bullish manner. Our leaders are more or less useless, but that's the devil we know and it's priced into the tape. What we don't know is who's really running the European financial system. This crisis is emanating from the European banks. The financial system over there is in very real danger of seizing and the disease is spreading over here at break-neck speed.
Yoshikami agrees that the only players in Europe with the money to help are France and Germany, but any plan those quasi-allies might form is nascent, at best. The ECB is a puppet, the Fed is in a box, the future's uncertain but the end is always near. What could snap us out of it? "Best we can hope for at this point is that someone at the European Union will wake up and recognize that the world is watching; inaction will lead to panic".
In a world of panic the smart play is sitting in the bleachers. At least for now that's where you'll find Michael Yoshikami.
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