Tuesday, August 2, 2011

Mid-Summer Gyrations

uncle sam

You have no doubt heard by now that the U.S. debt ceiling deal has been passed. For interest sake, the debt ceiling has been raised 78 times over the past 50 years. Many of those previous deals never made the front page news. This time, it hit the front page of every news paper around the world as the U.S. struggles with chronic deficits. As a bottoms up ( looking at individual companies ) investor, I don't spend much time trying to figure out what's happening in the overall economy. I just look for good cheap stocks. It reminds me of the famous investor Peter Lynch's quote:


 "Predicting the economy is kind of like trying to predict the weather.  Yes, you can get close
      but very rarely are you completely right."

After all, how many people accurately predicted the 2008 financial collapse? Not me.
However, the pessimism that has gripped the markets for the last while, has created opportunity.
I recently wrote, that it's a good time to have cash. Well, now it's a good time to start deploying that cash - but slowly. But remember, we are only 5-7% off of all-time highs, so you have to be very price sensitive as not to overpay. But there's value for long-term buyers of equities. I've recently added to CSCO, BAC and BIG.

There's also value in FFH.TO, WFC, MFC

Disclosure: I own FFH.TO, WFC, MFC, CSCO, BAC, BIG

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