Finally, The End Game Begins
Inflation fears are rising. However, inflation is not the main risk - business does not have much more pricing power. Rising business costs will mostly squeeze profit margins - rather than push prices.
Stocks are fully valued – perhaps overvalued. However, the small investors are still bearish and standing on the sidelines. The market will probably not top out until they have joined in. The market may very well ignore the profit squeeze as the little guys and other bears capitulate and drive the stock market to another unsupportable peak.
The recent hints of a recovering economy will prove temporary or false. 2007 will end with a slow economy, and 2008 will be a difficult year.
posted by zephyr @ 10:42 PM
3 comments
3 Comments:
Wrong. Stocks are still cheap, corporate profits will continue at around 9%, the next 3 Q's will ring up 3%+ GDP, and '08 will be more of the same.
Those not fully invested will continue to pay the price.
Anon, I hope you are right about the economy and profits.
While I do not think the sky is falling, I do think the economy will cool down.
You were saying about "inflation fears"?....
As far "stocks are over valued" - Obsurd.
Equities are still about 25% undervalued relative to their earnings and the current level of interest rates, a level of undervaluation last seen 27 years ago.
You're getting this one profoundly wrong. Spending too much time on Calculated Risk, Barry Shitholz, etc. are we?
Post a Comment
<< Home