Just jumped hoops with BofA on the Monday open as the market found itself eager and rumbling on. Why is it unlikely to sustain its run? because we have seen numerous instances in 1929, 1930, 1931 and 1932. Why is it likely to be better this time? one good excuse is that this particular investment has a more global base and is not us centric. the disadvantage is that the market is talking about its total exit from the US another good excuse is that their risk management usually ensures that LTCM's and other geniuses full of poker (minding the pun, but the hurry to summarise is overkill) are not part of the firm's investments ( not just off balance sheet) and have a finite relationship to the capital held. The same advantage today holds for BofA as they publicise their change of heart!!! the disadvantage is that they are global but not really big THE BIG RESULT: There is nothing to say that the market will ever improve, but like all good things, this market holiday must also come to an end ( i usually do more serious pieces, but this is in the middle of today;s market sessions and Obama might still find a facial flaw next week that might erase the hobnobbing) And the market will invest in good long term stocks not small and medium term full scale single line of business flaws called american banks...and that just leaves a select few that can bid with Goldman Sach's for the next rich portfolio and/or like Wells Fargo fund hollywood titans family accounts. And remember you can but only lose a 100% of the investment, whether they buy you a derivative or any other exotic...your gains are unlimited, it helps therefore to not think percentages all the time and think value in cash and hard dollars.
$6.8075 (03/23/09)
