Markman's Ikonomy
From Markman's latest...
You've heard the bromide that says you can survive anything with a diversified portfolio?
It's perilously untrue in the New Ickonomy, as financial, utility, technology, energy, drugs, steel and real-estate stocks
are down 56%, 34%, 45%, 43%, 28%, 69% and 49%, respectively, this year.
If you don't believe it, ask the president of Harvard University, who announced this week that her school's well-diversified,
$37 billion endowment was preparing for "unprecedented" losses that would lead to cutbacks in financial aid, construction and school programs.
We're about 300,000 job losses away from the worst of the 1991 recession, which is one month's total lately,
and about 1 million losses away from the worst of 1982, which could be reached by February.
Meanwhile, service job losses alone are already worse than a level last seen in 1974.
Indeed, the Fed, which now already owns 15% of all U.S. commercial paper in addition to Fannie, Freddie & AIG and stakes in several fast-faltering banks...
such as Goldman Sachs Group is increasingly looking like the classic dope who keeps averaging down on bad investments until he's got no money left.
Instead of rejuvenating markets, bailouts have only created a bigger rush to dump assets onto the government.
My recommendation is to avoid getting sucked into rallies in seemingly cheap stocks and high-yielding bonds except for brief trades,
and just guard your cash patiently while awaiting the next bull market that's bound eventually to emerge after a lot more sideways action, or worse.
You've heard the bromide that says you can survive anything with a diversified portfolio?
It's perilously untrue in the New Ickonomy, as financial, utility, technology, energy, drugs, steel and real-estate stocks
are down 56%, 34%, 45%, 43%, 28%, 69% and 49%, respectively, this year.
If you don't believe it, ask the president of Harvard University, who announced this week that her school's well-diversified,
$37 billion endowment was preparing for "unprecedented" losses that would lead to cutbacks in financial aid, construction and school programs.
We're about 300,000 job losses away from the worst of the 1991 recession, which is one month's total lately,
and about 1 million losses away from the worst of 1982, which could be reached by February.
Meanwhile, service job losses alone are already worse than a level last seen in 1974.
Indeed, the Fed, which now already owns 15% of all U.S. commercial paper in addition to Fannie, Freddie & AIG and stakes in several fast-faltering banks...
such as Goldman Sachs Group is increasingly looking like the classic dope who keeps averaging down on bad investments until he's got no money left.
Instead of rejuvenating markets, bailouts have only created a bigger rush to dump assets onto the government.
My recommendation is to avoid getting sucked into rallies in seemingly cheap stocks and high-yielding bonds except for brief trades,
and just guard your cash patiently while awaiting the next bull market that's bound eventually to emerge after a lot more sideways action, or worse.
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