Recession: Yes or No?
I am really enjoying the information being put out by Jeff at A Dash of Insight. I am more interested in looking at individual companies and try to ferret out how well their businesses are doing while Jeff has and “insightful” approach to the macro side of markets and often debunks the hysteria of the current moment. Here is an excerpt from today’s post, read it all:
The recession scare has power for three reasons:
1. The argument that problems in housing and credit markets will spill over into the general economy is eminently reasonable and generally understood.
2. Most market participants have memories of the 2000 bubble era. They connect the recession, which was actually quite mild, with a massive decline in stocks.
3. Investors and traders alike have no fundamental valuation measure. Many of them have calibrated their measures to the last few years, the period of skepticism. They do not realize that the stock decline in 2000 was mostly the result of excessive valuation, not the recession.
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