Friday, June 17, 2011

Just About Time

Here is the cover of this week's Time magazine. This reminds me, although to a lesser extent, of the famous Business Week cover from 1979 - published just before the start of the greatest bull market in history - 1979 to 1999.

It's important to note that these publication are not wrong in the data they present. In fact they are basically right on, with respect to the problems the economy faces both then and now. The problem is their timing - they are out of sync with the market. They are reporting on issues and events that are already discounted in the market. The current soft patch is baked into the cake. So, anyone reading this cover would get the idea that it's time to sell. Remember the market looks out 6 to 12 months. The recovery is happening, just not at the brisk pace that everyone expects or wants. The S&P 500 is down 7.1% over the past 6 weeks. The TSX is down 9.1%. Prices are more reasonable now then 6 weeks ago - but you still have to be selective. My crystal ball is no clearer than yours, but lower prices are good - for buyers. It's good to have cash now, for those down days when you can pick away at good & cheap stocks. There's value in BIG, CSCO, BAC (bought some today @ 10.61) and BRK-B. It's just about time - to buy.

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