Stock Markets – Reversal of fortune, but don’t cast caution to the wind

[prieur]

The SEC’s announcement to curb naked short selling, together with a dramatic drop in oil prices and a series of better-than-feared earnings announcements from US banks, triggered a recovery in investors’ risk appetite, resulting in a strong stock market rebound.

Although the near-term outlook has improved and the long awaited technical stock market rally has probably commenced, it is premature to cast caution to the wind.

Follow the link for some thought-provoking news items and quotes from market commentators during the past week.

http://www.investmentpostcards.com/2008/07/20/words-from-the-investment-wise-for-the-week-that-was-july-14-%e2%80%93-20-2008/

That's the way it looks from here. What do you think?

[aquaswim47]

In my opinion, the bottom is in. Time to load up on stocks!

As always, I must say that I could be wrong, very wrong. However, the valuation on the market looks good. There are many bargains; the difficulty is in choosing which sectors will provide the greatest return. Do you go with sectors that have been hot or those that have had abysmal performances? A little of each? I find this to be a fascinating market.

I wish everyone the best when it comes to performing well in the stock market. I also hope that we are all successful such that we can continue investing and hopefully all one day become wealthy.

Take care and good luck to all.

[Airelon]

Whether the bottom is in or not, I'm not sure. I think that bottoms are actually a process, rather than any single event. And we still have this inflation beast to deal with ...

This is my first bear market. In 2001 I was still too new to stocks to really know what was going on, and I was more involved in the futures markets at that time.

I called the top of the least bull run, I had stopped buying stocks as a dividend DRIP investor to invest for the long term actively on July 15 of last year. By February 4th, I knew this bear market was getting started, and that we'd see the high 10,000's again. And the stock market is a forward looking beast. But I thought it would take a bit longer than it has.

I'll agree that this definitely is an interesting market to watch unfold. I usually pay attention to seasonal tendencies, which means that I don't buy or invest in the summer months. But this market has so many deals right now? It's extremely tempting ...

Edit: Hmmmm, my BAC just posted results of .72 a share, street was expecting .54.

Interesting market indeed!

[Fredledingue]

Nice, very nice bargains right now, but be cautious, August, when everyone has set a stop loss for the hollidays, could bring in bad surprises.

The market is still hesitating and quick to sell.

[Ray The Money Man]

I admit, I am building some positions. But I have been around long enough that two words haunt me right now......Louise Yamada. If you don't know who she is, do some googling, etc. All these years she never gets the cycles wrong. She doesn't pick the stocks, but she will tell us when the bottom is in and she is calling for DOW 10,000......I am going to go get sick now.

Just take every profit you get right now. Don't fall in love with your winners.

[prieur]

Ray: Have you read Kate Welling's (welling@weedon) interview with Louise Yamada? If not, please send me a message through the contact button on my blog (Investment Postcards from Cape Town) and I will forward you the report.