When in Doubt, Sit it Out
By Jim Farrish | September 23, 2008 | 8:34 AM | 0 Comments
A government of the people, for the people and by the people… not buy the people. Investors voted yesterday on the proposed bailout discussions from Congress by bailing out of equities. The power grab many legislators are attempting in the name of ‘helping’ Sammy taxpayer left many disgusted. We could get into all the political BS surrounding this deal, but the one thing Paulson set out to do, is being left behind. That was and is restoring confidence to the US financial markets. This is not about homeowners getting a refinancing package, Treasury taking equity positions in publicly traded companies, or curbing executive compensation. Lost confidence was reflected in the dollar. After making gains back above 80 on the dollar index we are now trading at 76. Restoring confidence is a big task at this point and one that may take years.
When in doubt sit-it-out. That is pretty much where I am as an investor. Based on the volume yesterday, I am not alone. The short squeeze in oil yesterday sums it all up for me. The risk of the market and the outside influences aren’t worth the risk. I’d like to say I am just fine holding cash, but we’ve added excitement to that with the breaking the ‘buck’ last week. Regardless, I will sit on the sidelines and see how this plays out. There will be plenty of opportunities created by this process as it plays out. You won’t want to miss the new reality show that airs today at 9:00 am EST – Willhe, Fleecehim & How. Paulson and Bernanke head to Congress for B. Frank discussions.
“After they have exhausted all other avenues, Government, will eventually do the right thing.” Will Rogers.
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