Tuesday, November 3rd is Election Day. Speaking of elections, let's remember that the pricing in our capital markets is actually a voting mechanism by investors. Investors have been voting "YES" all year to "reflation" and "NO" to Armageddon. Visit Stub Hub and check out the current World Series prices and logic will tell you that the bearish perception of the world certainly isn't reality.
I loved last week's price action, as it did exactly what it should - defy logic and confuse the crowd. You see, from Labor Day until the moment when CC threw out the first pitch of the World Series was supposed to be panic time - sell baby sell. It wasn't! We actually survived the anticipated meltdown. Now, here comes November, a historically strong market time, and, to defy logic, here comes panic time.
My advice to investors is to let the pessimism build - let others panic; let the crowd begin to talk about a return to the dark days of earlier this year. Successful investors need to stay focused - keep your eye on the ball.
Yes, investing will be getting tougher; the past six months have been about "all boats rising." I see this moment as an inflection point when not all boats will rise together. However, the truly strong boats will rise and sail strong. Whether a currency, equity, or bond, no longer will all be created equal.
All year I have talked about 2009
= 2003, in terms of market performance. I am beginning to think that
2010 = 2004 where investment opportunities will exist in all asset
classes. The capital markets, however, will make investors work much
harder to figure out the best investment in each of those asset