Top Line: Today the market gave us fresh evidence that the commodities are coming back. This is evidence for the new inflation that is coming after all of these injections.
Yes, it's Wednesday. Tonight, we think the market is in the process of confusing many participants which is it's main job. So far the Dow has moved up from its November low around 7450 to just above 9000 a couple days ago. As we see it that's about 15% and the bears are claiming that the market will suffer another drop before we can consider going up again.
The mere fact that the bears are getting even a chance to express themselves is reason enough to suggest the 2008 bear market is Over. People are in enough fear without reading some of this bearspeak. Haven't you heard enough of that from the Update when you needed to know it, actually before you needed to know it so you didn't lose a lot of money being long. These bears have come out of the woods and now we're supposed to listen to them. Right...
The current situation is far less troublesome than what we were dealing with back in October and November. Back then stocks were cheap and people were scared. Now, people are not quite as scared but are cautious about what they are doing. This is still the point...there is a lot of liquidity rolling around and it is going to go into the stock market.
Our position going back over the past couple of months has not really changed: Stocks are cheap, Treasury bonds are in a bubble, gold mining stocks are still cheap as the dollar should get cheaper.
Thanks for the nice comment, Erick. Putting our thinking out there for the next several months is our opinion and you should look at it as one item in your thinking process, not the end all in your decisions.