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Old 06-24-2002, 03:27 AM
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Default Re: You are misreading the situation



Its not like I would suggest investing in this particular name, just the concept of saying I will take my money out of stocks as a whole because I think CEO's are corrupt is irrational. Anyways I personally think the corruption issue isn't a heavy weight on most stocks, just the names that get talked about on CNBC or other shows of stock hype. After all the guy who owns stocks that aren't named is likely to say "nah, that is what the guys at that company do. Not my guy, my CEO is great and has a great concept/plan/strategy to bring me some profits" Stock overhang really is taking the money off the table of the institutions, the hedge funds, the big money...all people that are concerned about the risk of going long when another company could come up dirty. It is not going to be easy to overcome in the short run and maybe we need to break through some of these lows to clean out the negative sentiment and get some capitulation from the losers that won't be part of the next rally. From a fundamental standpoint I just can't imagine the market being lower from where it is now 9 months into the future, with only one exception. That would be wholesale dollar collapse, but I am sorry I just can't see that happening. It will tumble a little more, but quite frankly that will yield some longer term benefits for US industry and minimal inflation since relatively few of our imports are priced in Euros. A majority of our imports are from Canada, China, Mexico and Taiwan...all which have currencies that will likely stay more marked to the dollar than the Euro. The Yen is the only larger concern, but Japanese people aren't going to bail out on the US for very long especially with the BOJ defending the Yen at unpredictable intervals. All in all, I think the currency devaluation will play very favorably to the US economy as long as it doesn't cause a panic. Since the US economy is clearly stronger than just about anywhere in the world right now, that isn't going to happen either. So the chips are really stacked, maybe the market moves down a little more, but I think the odds are highly in favor or a pickup in the near future and a pretty strong rally as sentiment really couldn't be much worse.
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