Buy and hold, the callsign for generations of investors who couldn’t be bothered with the day-to-day trade of stocks, futures, bonds etc, is definitely not the thing anymore.
Everyone, from Warren Buffett to my mother, is saying that this recession is going to last, last and last some more. This is what the ones I believe in – Mish Shedlock, Karl Denninger, Barry Ritholz et al – have been saying for the last 2 years as well.
Well, here we are. With the dismal news of the biggest banks in the US and their economic state of affairs coming out late last week, the Asian markets are at this moment some 3-4% down, Europe is opening in the red and I do not believe the bailouts of AIG and the banks by the US government will do much to help US confidence and the Dow Jones later on today.
We’re looking at a stock market that has lost more than 50% of it’s value in 1½ years. It’s going to lose a lot more. the S%P 500 is projected to land at about 250, from the 700+ it’s now on. If you have stocks, either you’re in for the LOOOOOOONG haul (2015-16 or something) or you should cut your losses now.
These are interesting times. I do hope we’ll all get out unscatched in the end – singed, but not burnt, hopefully. Although I’m not betting on it. The last time the outlooks were this bleak, a chap named Adolf saw hos opportunity…