I rarely get to see any CNBC but got to watch a little when I had some time off during the holidays. It seemed like a lot of economy pumping and cheer leading to me. Not quite euphoria though. Is anyone else concerned about aggregate Q4 revs and earnings disappointing ? Could we be near an earnings induced inflection point for the market ? Here's what is starting to worry me.
1. Where's the top line? Juicing earnings through cost cutting may not be sufficient at this stage.
2. Persistent tight credit. People with iffy credit want to spend but can't borrow. People with good credit still too nervous to borrow and spend.
3. Sovereign debt may be a bigger problem than the market realizes now.
4. Bad commercial real estate debt may be a bigger problem than the market realizes now.
5. Lots of uncertainty with regard to legislation and taxation. Businesses large and small don't know what to do because the rules of the game keep changing. They won't expand, take risks, or hire which contributes to a negative feed loop of unemployment, forclosures, and lower sales and earnings.
6. Populism. Punish anything that makes good profits. This leads to a lack of new investment.
7. Geopolitics. Every administration has to deal with some sort of international crisis at some point and the current leadership is fairly new and yet unproven in this area.
8. Unemployment. I am concerned that unemployment may have a "mini spike" upward early in Q1 as many employers do everything they can to keep from laying people until after the Christmas season.
I wouldn't call myself a bear as I still see places to invest and I really like oil and gas. There are just some things that don't seem quite right with the markets and I would be very interested in hearing the boards comments about this. Good luck.
That's why your invested in commodities rather than banking, consumer disposables, tech, etc.
Commodities are generally driven by world demand, emerging markets which does not have the same problems. In fact they will surpass the developed countries in due course.
The same economic issues that will affect industrial countries negatively will provide a benefit to the developing.
The only way industrialized countries will maintain competitive advantage is to increase incremental value that both incorporate environmental and energy efficiencies. It can be done. Those companies will succeed but many will fail in the change.
Horizontal drilling for nat gas provides benefits for both. If the stock does go down, simply buy more....
Ive been in this stock for several years and started buying at $56/share. I also bought at $12/share and have sold very fews shares over time and gradually kept increasing the total position while driving down av. price. ......
Nat gas will continue to expand even in the US simply because people need heat and power to live.....If your worried about this stock, hedge your bet by buying a stock that benefits from low nat gas prices.....
If your worried about a short term pull back then you can always protect your postion with puts, which I have also bought over time, but right now Im strickly long. Im not stepping in front of the consolidation going on in nat gas.
One more thing, I would recommend a position in gold. Its a hedge bet on currency devaluations world wide, which is gaining speed. Personally, I like the miners for the leveraging in a good growth profile. Ive made good money in Sans Gold and Yamana Gold, but a few others are also doing quite well.