10/15 newsletter
*** Market
The US market underwent another week of aggressive correction. Small-cap is hit particularly hard. However, this may post the second best chance to buy stock in a year. (But I am fully invested, no free funds available!) You may wonder what is causing all this craziness. I like to think that the market just "have to" do this to wipe out speculation, especially in hot sectors like oil and real estate. But if you are economist minded, here is the reason.
First of all, energy stocks are overheated. Several foreign markets as well. Second, President appointed a panel to fix the tax law concerning mortgage deduction to bring more "fairness" (federal tax law favors capital gain on real estate over other types of investment) under the light of a very speculative housing market. This pours cold water too. Third, a FED chief voiced concern on inflation. Market fears that more agressive interest rate hike is in store... Enough bad news? But all this is just typical of October.
*** Comment
I read a very interesting article of Greenspan, I hope you can enjoy it too. I am no longer resentful of my job loss (Ada!) since it is part of the market mechanism designed from on high. What can you do? (However, I still believe management can not blame on the economy. If a general manager is blaming economy, he should be fired in the first place. Why waste investor's money?) This also shed light on how you should see your corporate environment. No wonder Buffett gangs always said "obtain large moat, agressively cut cost"...
http://www.federalreserve.gov/boarddocs/speeches/2005/20051012/default.htm
If you are eager to properly design your retirement, you can read David Swensen's book (only $15, about a trade's cost). I read a few pages yesterday, it is a very fine, solid book, telling you how to avoid Wall Street traps.
--Steve
The US market underwent another week of aggressive correction. Small-cap is hit particularly hard. However, this may post the second best chance to buy stock in a year. (But I am fully invested, no free funds available!) You may wonder what is causing all this craziness. I like to think that the market just "have to" do this to wipe out speculation, especially in hot sectors like oil and real estate. But if you are economist minded, here is the reason.
First of all, energy stocks are overheated. Several foreign markets as well. Second, President appointed a panel to fix the tax law concerning mortgage deduction to bring more "fairness" (federal tax law favors capital gain on real estate over other types of investment) under the light of a very speculative housing market. This pours cold water too. Third, a FED chief voiced concern on inflation. Market fears that more agressive interest rate hike is in store... Enough bad news? But all this is just typical of October.
*** Comment
I read a very interesting article of Greenspan, I hope you can enjoy it too. I am no longer resentful of my job loss (Ada!) since it is part of the market mechanism designed from on high. What can you do? (However, I still believe management can not blame on the economy. If a general manager is blaming economy, he should be fired in the first place. Why waste investor's money?) This also shed light on how you should see your corporate environment. No wonder Buffett gangs always said "obtain large moat, agressively cut cost"...
http://www.federalreserve.gov/boarddocs/speeches/2005/20051012/default.htm
If you are eager to properly design your retirement, you can read David Swensen's book (only $15, about a trade's cost). I read a few pages yesterday, it is a very fine, solid book, telling you how to avoid Wall Street traps.
--Steve
posted by Steve at 9:30 AM
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