Stock selloff seems knee-jerky
Why are we selling our stocks today? Because the US Treasury bonds got downgraded by S&P - yes, the same S&P that said a big pile of subprime mortgages was AAA just a few years ago.
So when we sell our stocks because we're afraid of that S&P downgrade, what do we all pile into? Treasuries - yes, the same treasuries that just got downgraded.
I'm not saying all of this stuff bodes well for the economy, but to me that trade doesn't seem rational.
Think about it - if the dollar collapses what do you want to own - stocks or bonds? And if you aren't thinking dollar collapse, then what are you thinking about in regards to this downgrade?
I'm calling bearsh*t on this selloff today. I don't think that S&P downgrade means much. It's overdone.
Buy stocks that you want to own 5 years from now and you can get them for 10-20% less than you could a week or two ago. If you like them then, I see no reason why you shouldn't like them now.