The Summer bull market has fooled me all along, as I really didn't think it would last as long as it has. It sure looks like it is finally done now. IMO market and ABT are headed lower now. I do believe that whatever pull back we get will set us up for higher moves later in year or early next year. ABT has historically been strong in November-December. IMO Fed will keep raising rates longer than most of the various "experts" are speculating. As for interest rate sensitives, I don't believe they can forever escape the negative impact of continually increasing interest rates. IMO time to keep powder dry for now. Good Luck Longs!
I asked the same question on the NFI MB and nobody, NOBODY came up with a valid answer. Most of the folks there only pay attention to the divvy: I have stated it here many times, divvies are POOP, even Pluto understood that.
Look at DVY and XLU, the divvy is the bait.
I repeat: � Divvies are POOP. �
Have a nice day! Kiki
I loosely follow NFI, mostly through comments on this board and occasionally checking that stock's price. I have never owned any. It looks to me that the rising rates and eventual spiraling down of home prices and mortgage holders walking away from their debt that I predict will hurt companies like NFI. Also, some of the smoke and mirrors comments by Herb Greenberg regarding that stock would keep me from buying any. But each time it has gotten down to the low $30's it has been a buying opportunity. So, who knows? Snug
The question is: will the Fed be able to raise long term interest rates and burst the real-estate bubble. Raising short-tem rates didn't do the job, it is why Greenspan now asked Republicrap John Snow to finance the deficit with 30Y bonds. The world is hungry for long-term bonds, the EU issued 50Y bonds at 4% and they were way oversubscribed. But if you flood the market with new issues, soon or later investors will want a higher return. There you go! The question is how long it will take for that to happen. Your guess is as good as mine, but one thing fer sherr is that the NFI bagholders will get hurt big time.
The housing bubble and the rise of REITS were underwritten by low interest rates. The period of low rates was an artificial situation, not based on laws of supply and demand. I have stated here in the past that the Fed has no choice but to raise interest rates to keep the Dollar afloat. If it is allowed to fall, we can't entice foreign capital needed to fuel America's ability to live beyond its means. As is often the case with cause and effect, there will be additional causes all working in combination that will bring about the bursting of the housing bubble. Another key factor is that eventually the effects of higher interest rates and higher oil prices will dampen the economy. That will mean increased joblessness, and there will be greater numbers of homeowners not able to make the mortgage payments. Compound this problem with all of the people who have taken out Ditech loans and the like, using the increased value of their home equity to borrow more to buy more stuff. As foreclosures rise, in a backdrop of higher mortgages, overbuilding on spec, and inevitable downturn in housing prices, more home owners will simply walk away from their investments. This will lead to a downward spiral in housing prices. I believe that the reduction of average American net worth that will result from the bursting housing bubble will also adversely impact the stock market, although I don't believe that all sectors will be hurt. I believe that Big Pharma and healthcare will be seen as immune from the recession or depression that results as these events unfold. Interest rate sensitives, including banks and brokers, retailers, tech, homebuilders, furniture, autos, appliances will be among the losers. Snug