To be honest, right now you need to be very careful as an investor (as opposed to a trader), because of the current market conditions.
However, like Phil says, you can make profits going long in a bear market. The only difference is this is not any old bear, this could be a CAT 5 economic hurricane that puts the S&L scandal to shame.
IMO, we have only seen the tailings, or nose, or how ever you want to put it. 
Only time will tell, but it is better to be cautious instead of a consummate optimist. Anyone who confidently believes they’ve seen the worst, and it is all blown out of proportion is a fool and has no concept of economics or the underpinnings of the financial systems. Those people are the ones being fooled by those companies, financial institutions and others with motives to quell the bloodletting. If their opinion is not being based on the words coming out from those places, then they are basing it on nothing but their gut feeling, and we know where that can get you.
When you factor in just the housing, credit, employment, consumer confidence numbers, which are right in front of your nose, it is easy to see something quite troubling. Now factor in insolvency, the dollar, inflation/deflation, bad debt being marked. Look at the bond market… 80% of AAA rated bonds are backed by subprime loans. When people start valuing bonds backed by subprime the same as a US treasury bond (as close to iron clad as you can get), you have a problem.
In a bull market just about any long strategy works well. In a bear market, most fail, so it’s not throwing darts at a dartboard with Rule #1 qualified companies. You will need expand those filters and look for companies that are “relatively” recession proof on top of a great value.
October 29th, 2007 at 2:20 pm
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