It's getting more difficult to stay long on stocks, even stocks that I have concluded are strong companies with strong potential for future earnings. To put it bluntly, things are backwards and bordering the phychotic at the moment. Nothing seems to be trading on fundamentals, as even highly profitable companies are being sold in favor of US treasuries and bonds. Keep this in mind though: The US has a national debt approaching 16 TRILLION dollars, with no foreseeable plan in sight to deal with it. Japan is in an even worse debt situation. Contrast this with the Euro-Zone, which is at least trying to implement austerity to deal with it's fiscal mess without destroying the Euro.
The markets simply see countries needing bailouts, and are selling the Euro in favor of countries that just print more money to deal with their debt. How stupid is that! Unfortunately for investors, this trend must somehow reverse and we must get back to fundamentals - if Japan;'s lost decade(s) is any indication, that could take a very long time. Let's hope not.
Here is the graph for today. Consider it before you start selling off all of your assets to buy bonds in fear of a crash. (click the picture to enlarge)
The markets simply see countries needing bailouts, and are selling the Euro in favor of countries that just print more money to deal with their debt. How stupid is that! Unfortunately for investors, this trend must somehow reverse and we must get back to fundamentals - if Japan;'s lost decade(s) is any indication, that could take a very long time. Let's hope not.
Here is the graph for today. Consider it before you start selling off all of your assets to buy bonds in fear of a crash. (click the picture to enlarge)
