August 11, 2011
There has been outright PANIC in Stocks, Bonds and Gold during the past three days…I don’t recall ever seeing such mass common hysteria in all three of these markets at exactly the same time…
The world is not coming to an end…FAR from it…My own dumb impression is that the last few weeks of monster market movements are the result of nothing more than political theater and market mob psychology at its worst.
This IS a game. What you are supposed to be doing now is Buying Stocks, Shorting Treasury Bonds, and Shorting Gold (I can’t believe I saw it referred to yesterday as “the only safe investment”).
I make a recommendation to my big sister every few years. Yesterday my advice to her was “Sell a big chunk of your bonds. Take the money and buy IBM” (she did). Three years from now, after several years of maybe 4-5% GDP growth, with two decade long costly wars far behind us, and the deficit issue having been long defused, people will be looking back and wishing they’d seen through all the smoke and fear…and BOUGHT QUALITY STOCKS in August, 2011. This is March, 2003 and March, 2009 all over again…
We’ve had debt since this country was founded. Debt has been a part of the system for several millennia (at least). Country’s have it. Businesses, states, municipalities, and individuals as well. Yes, when it gets too big as a percentage of revenue, for any of those entities, it becomes a problem. Then you retrench…and deal with it…and life goes on. Greece is not going to cease to exist, nor Spain or Italy…Same as New York City, which went through bankruptcy in the 1970’s. Did it disappear? To outline my perspective on this whole recently-become-SO-important debt “crisis” would take several boring pages, but I can sum it up with this: The world is exploding with capitalism, consumerism and technology. All we need (and will get) from here is several years of growth…and the government revenues it generates…and these worried moments in economic history will be just a blip on the timeline. This is NOT 2001. It is NOT 2008…In fact, it’s not even close. We have already been through the toughest times. It’s all up from here.
Some of you will say I’m nuts. Let’s see where the markets are 6 months or a year from now…or maybe even in a month or two...
Give me a call if you want to question or protest…or take a position.
I am executing all of these ideas with both futures and options…Call me for numbers if you want to look at possibilities.