How High Is That Wall Of Worry?

I woke up yesterday Morning (Monday) only to learn that President Obama had imposed tariffs on China.  Then, I see that Osama Bin Laden had released a new tape.  On top of all that, we’re still hearing about health care reform.  Surely, the bears will have their moment in the sun. If there was any reason to sell, it was yesterday.  Yet, we finished the day up about 27 points on the Dow only to follow that with an up 56 point day on Tuesday.

The wall of worry I’ve been describing on my radio show is rearing its ugly head.  Maybe it’s not an ugly head.  I think this is exactly what we need.  It’s the fuel that keeps us going up.  I saw Meredith Whitney on television this morning discussing how much trouble the banks are in.  I hear conspiracy theorists describe how the market is “propped up.”  I get e-mails of whining and complaining that the market isn’t going anywhere.  Last time I checked, we were at new highs.  You only whine if you’re not making any money.  This wall of worry continues to get larger as do the profits from stocks.  As the market continues to climb, it’s leaving more and more people behind that will have to start buying and capitulating at some point.  That will probably take a few more months.  That will be the time to exit and get very defensive.  But, not yet.  The improvement I’m seeing has not been fully discounted according to my work.

Besides the improving economy (8 better than expected reports this morning) and good internals, we now have the dollar continuing to fall.  That means we’re free to continue to invest in mining, metals, & emerging markets.  Countries benefiting the most are South Korea, Taiwan, Brazil, & Indonesia.  On the commodity front, we’re seeing good action from coal, silver, nuclear, & gold.

Take your pick and don’t get too cute.  Don’t over think this market.


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September 2009
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