DOW 6000- 1st Quarter 2009

Hey Everyone! Sorry for the delay for this particular edition. Most of you that have been keeping up with the market are wondering what the heck is going on. Here's the deal kids, ignore the bailout bs for both the banks and the possible bail out for the big three in Detroit. Everyone needs to pay attention to the big picture. The big old four letter word at present is "Recession" (yes, I know it is more than four letters, but I couldn't think of a better way to introduce it). The economy is shrinking, mainly due to the credit crunch which is starting to loosen up as we speak. Don't get too happy just yet. These things take time. If you are a long term investor as I am, then you'll be patient. The reason why you are seeing the big swings up and down is because there are those of us who are dumping everything and anything at the first sign of bad news, no matter how unimportant and unrelated this news is to the particular stocks we own. Others are trying to guess the bottom or at least buy on the dips. To be honest, this could be one of the rare times that day traders might actually make money on a consistent basis. Buy on the down days and sell on the up days, since they we seem to get triple digit down days 3 days a week and triple digit up days 2 days a week. Anyway, like I said with the last post. Stock up on cash and ride this rollercoaster out from the sidelines. The market has been beat up and folks (institutions as well) are looking for a rally to finish up the year due to the holiday season. That will probably happen, but the big picture is that the economy is hurting badly and everyone should avoid the herd mentality of buying when the market rallies during the next six weeks. 1st Quarter 2009 is going to be ugly. All those gains you might make will be erased and then some in the first months of the new year. Just remember, good companies that have no reason to get beat up are getting crushed. Let the credit market loosen up some more and you'll see some stablization in the economy. Don't be surprised is a big 3 bailout sends steam up the rear end of the market. Don't get excited. Emotion breads irrationalization. Keep doing your homework and wait for things to pan out before getting back in. Look at it this way, I haven't put one dime in the market since January 2008 and don't plan on putting any in until March/April 2009. I could always be wrong, but given the current conditions, I feel pretty comfortable waiting until we start to see what the current credit market will do and what, if any, the effect of the $700B bailout will have. Till next time!