I'm anticipating that a double-dip recession is underway, and that near or shortly after election time, some kind of Iraq action is possible, and that the markets will discount for all of this even if it doesn't occur. So I plan to continue waiting patiently until I can pick up any common that I want 15% to 20% off, including BRK
<<I'm anticipating that a double-dip recession is underway, and that near or shortly after election time, some kind of Iraq action is possible, and that the markets will discount for all of this even if it doesn't occur. So I plan to continue waiting patiently until I can pick up any common that I want 15% to 20% off, including BRK>>
......three of my fellow retirees (2 CIA, 1 FBI)were recalled to government service after 9/11....they all stared moving into cash after they'd been back to work for a couple of months...they don't talk about their work, but their actions speak louder than words....I figure you can tell a lot about what a guy knows by where he puts his money....
My accounts run from 90% to 40% cash because of valuations and the economy. The political/terrorist risk to the markets is to me impossible to figure out, so other than respecting the possibility of it, kind of like a major financial institution meltdown or earthquake, I will try to act based on the valuation/economy, and learn to live with the third risk, e.g., avoiding travel related stocks like AXP, and all airlines and hotels.
While I can't pretend to predict the future, I would point out that Berkshire's Q2 results will be released very soon. When that happens, Berkshire is likely to become the trendy place to be because those results are almost certain to be excellent. It's still possible to see 1700 on the Bs (in which case I would be on margin for the first time ever), but I highly doubt it!
mr/ms Iwant: I think a case could be made that the Iraq invasion, if/when it comes will be almost an anticlimax to the currnet and ongoing constant chattering on all media fronts.
as to double-dip.......that would be more of a surprise and even more of a large dose of salt in the already very sore wound.
I think you'll get more discounts simply because valuations must come down. This is a major bear market following a major bubble and it's not even close to being over. we're experiencing the "crooks and scoundrels" phase. What's next? the Debt collapse? The tight-fisted consumer? A weak housing market? Oh my, the discounts could be quite amazing. 2 cents
First, I totally agree that valuations are the main problem. And if you expense options, take into account the change eliminating goodwill amortization, et al, valuations are worse than reported.
Second, I think it is a common-sense thing that the vast over-investment by businesses, massive over-spending/indebtedness of consumers, profitless and jobless so-called recovery revealed to be an inventory blip, and trillions of dollars of stock wealth wiped-out, takes on an inescapable momentum. It isn't just anecdotal, its common sense that the consumer will wake up and start trying to save for a change. And businesses -- why would they stick out their neck and invest? This most recent talk about another Fed cut is disturbing because it looks like the Fed could be pushing a string in a deflationary environment -- in which case all assets other than cash will suffer.
Third, I think anything with Iraq will be messy and could have nasty economic consequences if oil prices spike in the midst of a weak economy. But if Iraq keeps presenting the impression that it is willing to undergo inspection, it may become politically difficult to pre-emptively invade.