Monday, February 23, 2009

Right for a Day

Feels good to be right, for at least one day.  This is actually what I feared.  The market fundamentals are really breaking down here.  It is actually worse then it even appears on the surface.

The Dow Jones got killed today losing over 3% of its value and ending the day just above 7100.  My coworker joked today that we were going to see Dow 5000.  At least I thought she was joking.  She may not have been too far off which is a scary thing.  Now the Dow has not seen these levels in over eleven years.  But the problem is that we ahve had significant inflation since 1997.  Do not let the CPI tell you that we have had low inflation over the last decade. This is a complete farce.  We have actually had very significant inflation over the last decade.  Just look at housing and energy.   These prices are not accurately reflected in the CPI "core" data but the big lie that the government perpetuates is that this is unimportant.  Umm, don't we all have to live somewhere and pay for gas?

So when you take into account inflation, the numbers are even worse then that.  How sad is it that we have essentially washed out all progress and value in the market to levels not really last seen since the 80's?

I still have a significant short position in the market but I will probably cover tomorrow so long as the market does not do anything too crazy.  While I think the market still has some ways to go down, there is no reason to get greedy right now.  Take your gains and find a diffrent position to take.

1 comment:

  1. [...] should mention I actually was right two days in a row.  I mentioned at the end of my post two days ago that I was going to cover my short position.  My [...]