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starbucks4ever (98.75)

Looks like we have another bottom in place

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August 31, 2010 – Comments (5)

And it's not because of geometry. (Anyway, geometrical patterns is a poor way to make practical decisions). But stocks are again priced reasonably given the current environment. And the bubble mentality has not gone anywhere. If it had, we could, quite frankly, have the same stocks a little cheaper. But who wants to fight the Fed? We'll go up from these levels. S&P 1200 by November, anyone?

5 Comments – Post Your Own

#1) On August 31, 2010 at 12:59 PM, portefeuille (99.60) wrote:

sounds reasonable. now you just have to give up waiting for those "European blue chip stocks" to go down by as much as you expected a few weeks ago. they will not do that ...

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#2) On August 31, 2010 at 1:04 PM, anchak (99.85) wrote:

This one isn't over yet ....and yes I think we have a good shot at SP 1200  by Dec

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#3) On August 31, 2010 at 1:49 PM, starbucks4ever (98.75) wrote:

#1,

If Europe is as smart as you think, then my thesis is wrong. Then Europe takes the initiative, sells its new paradigm to the investing masses, and we wake up in the new world. we learn that Eurobonds are safe, Europe can print money and deflate at the same time; take your worthless dollars out of US Treasuries and invest them with the Eurobureaucrats; they will be safer that way and earn a higher interest; US is a basketcase, it can't attract investors, it is bankrupt, we are growing and leaving the Americans behind. See, even our ratings agencies (that we created half an hour ago) are saying that Europe is safe and America is risky. And do on. The first intelligent bubble-maker abroad can out-bubble us very easily. My bet is on the stupidity of Eurobureaucrats and on the intelligence of the Federal Reserve.  

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#4) On August 31, 2010 at 2:22 PM, russiangambit (29.37) wrote:

>  But who wants to fight the Fed? We'll go up from these levels. S&P 1200 by November, anyone?

FED has no political backing to do anhything of significance anymore.  What it can do, really? It cannot fix the structural issues in the economy and global imbalances witha sleugh of hand, The job requires heavy lifint in the real economy, not financial markets.

If you are betting on FED destroying the value of the currency, it can't do it very fast otherwise there will befurther a loss of confidence in US economy and lower stock prices. Alsmot every country is engaged in competetive devaluation of their currency because everyone wants exports. Thus it will be rpetty hard to devalue the dollar.

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#5) On August 31, 2010 at 2:25 PM, davejh23 (< 20) wrote:

S&P 1,200 by November of what year?  It seems far more likely that we close the year below 1,000. 

"European blue chips" will fall even more.  One of my favorite stocks is a German "blue chip", and it's recent price action has been perfectly correlated with the S&P except moves are more exagerrated.  It fell 70% when the market crashed, but financially, they're far better off than most US large caps.  Lately, when the market's up .5%, it's up 1%...when the market's down 1%, it's down 2%.  If we get any continued weakness here, it will underperform by a wide margin.

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