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Showing posts from February 17, 2008

The Trend is your Friend

The trend is your friend and so far the trend has been down. There hasn't been much to cheer about these days. As long as there is a freeze in the credit markets the equity markets will continue to suffer. Borrowing money is how American businesses grow. No money, no growth. I think the Feds have done a good job in providing liquidity to the markets. Banks and other financial institutions are now in a better position to re-lend that money to their clients at better rates. However, what if banks continue to cautiously lend and continue to tighten credit standards so that not even their best borrowers can qualify? What would be the long-term effects of such stringent lending policies? Which industries would be the most affected and how can an investor profit from such a scenario as this continues to play out in the credit markets over the next 6 to 12 months? These are issues that I will try to consider as I make my stock or bond recommendations over the next 6 to 12 months. The stoc