May 24, 2024

Breathless Hysteria Overdone?

The stock market has suffered one of the worst declines in history as we all know.

At this point, however, the breathless hysteria over how much worse things will get has become overdone.  Markets discount bad news and this market has discounted everything except the end of civilization.  The talking head predictions of doom dominate the headlines.   Today is probably psychologically equivalent  to when oil was peaking at $150 and predictions of $300 dominated the headlines.

Without bothering to consider what the future will bring, at this point there is money to be made on the long side.   The market is extremely oversold.  Nothing does in a straight line.  High quality Dow stocks have 5-7% dividends.  The Fed’s zero interest rate policy will force money into higher risk investments.  There is optimism building about a new Administration.

Besides some of the Dow stocks I am increasing my positions (on down days) in DIA and SSO.

Let’s all have a Merry Christmas!

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