Archive for March, 2008

Where the hell have I been??
Some welcome back, eh?
It’s been a rough couple months.
Regardless of specifics (like Google marketshare growing again in February), here’s the question everyone is asking:  How do we know when we’re at a bottom?
There are a few general predictors.
One of them is the contrarian predictor:  When everyone says one thing, the other thing is about to happen.  Obviously, just about everyone in the entire world is negative right now.
Another is the when-bad-news-doesn’t-hurt predictor.  We may have seen this one this morning:  Intel revised margin expectations downward and was poised to crush the market in the pre-open.  But it didn’t… the stock was only down modestly in the early going… and only closed down by 1 penny by the end of the day.
Another is usually referred to as the "final capitulation."  That is, when the market gives out one final gasp lower in a low volume way… almost as if everyone is just too exhaust to trade anymore.  I’m not sure if the precipitous declines, taken together, qualify, but then, we are only talking about general predictors here.
The final one is this:  Since the market generally reflects where we’ll be at over the next 12 months, the big question is this:  Where will we be over the next year?  Here’s what’s scheduled:
*  The Olympics. 
*  New President. 
*  Modification to our war strategy, either a more effective one or an end. 
*  Improving statue in the world means improving dollar means lower oil prices.  (A lot of oil’s rise is tied to the dollar’s decline since oil is tied to the dollar.)
*  The rally behind "green" will help, too, it’s amazing what America can do when we set our minds to it.
*  The global economy still growing and benefiting U.S. companies who, increasingly, get more than half of their revenues outside the U.S. 
*  Online media still growing at the expense of traditional media. 
*  A lot of these interest rate cuts and stimulus packages and such kicking in.
Except for the uncertainty of whether we’ll see a "final capitulation" or, in fact, have already seen it, I’m going to can stick my neck out and predict that we are, indeed, at the bottom.
So, welcome back to the next bull market.  Which will look a lot like the last one.