Monday, October 27, 2008

Are we too bearish?

I've noticed a definite trend while looking over our last few "Features of the week" posts, and that is a recent preponderance of bad news.

Whether we're talking about the direction of global financial markets (mostly down this year) or the fate of the global economy, it seems that most of the news we are talking about here is of the "gloomy" variety.

In a way, this makes sense. When we look at the news related to the markets and the economy in recent months, we see that most of it is bad. In fact, one of the defining features of this recent downturn, or "economic crisis", is its ability to continually surprise to the downside.

In fact, I think it's safe to say that most people have been caught off guard by how quickly and how far certain problems could spread throughout our well-linked global financial system.

Yes, there's been an avalanche of news regarding falling markets and never-ending bailouts over the past several months, and it seems only natural that we cover those stories and trends here.

At the same time, we've also tried to stay open to the possibility of stock market rebounds following sharp declines, while focusing on some of the bright spots and outperformers in this market environment.

Besides, not everyone is convinced that we are headed for a next Great Depression; just ask Irving Kahn.

So in keeping with the promise made in our "Themes for October" post, we will continue to try and balance the sentiment by tracking some of the more positive trends in the financial markets.

Tomorrow we'll have a new post highlighting possible investment opportunities as seen by some well-regarded investors, including Julian Robertson, John Hussman, Jim Rogers, and Jeremy Grantham.

Join us for that, and as always, feel free to add your thoughts to the discussion!

2 comments:

bmbull said...

I'll stay bearish until the market convinces me not to be. We're obviously not there yet, as of today.

David said...

For sure, I think we are still in the middle of a bear market that will probably last for some time (although one can never predict the duration of these movements, at least I can't).

Still, I think it might be an interesting exercise to take a look around and see what some other investors are currently bullish about.

Some people might be willing to invest in a select few shares, or certain commodities, or it might be a trade outside of these markets altogether.

We'll toss around a few of these investors' ideas and briefly discuss the rationale behind their picks. Your thoughts and input on these ideas are certainly welcome!