Thursday, October 9, 2008

Slow Motion Crash




That's what we've been seeing over the last month or so.

It kind of makes sense. Most crashes occur from levels where valuation is stretched. Not so this time based on prevailing estimates. Most crashes occur when investors are for the most part feeling good about owning stocks. Not the case at any time in recent memory. Most crashes happen quickly. This one has taken forever and isn't over yet.

The S&P 500 has lost 1/4 of its value and all of its mojo in the last month as every day that ends in the letter "y" investors find out that some element of the fundamental landscape is in worse shape than they thought, especially in regard to balance sheets.

It's strange to not have an opinion about how much worse this could get. I'm there.

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