Where we are now - October 8, 2008

Well . . . . . is it safe to come out from under the covers? Maybe not yet. It depends on what type of investor are you, if you are a contrarian (i.e. bottom feeder) this could be the time for you to shine. While most people are wringing their hands and watching increased worry lines appear on their faces, those who are savvy and willing to stomach some risk, now is a time to be getting cash ready to go back in. The bottom is near! Actually, at the current daily meltdown, the Dow will be at zero in only 19 more trading days! Is that something great to think about! Seriously, I would looking at things important to our standard of living. Industries like infrastructure, natural resources, energy and food. Areas to stay away from are the autos, like you needed me to tell you this! GM hit a low today that it had not seen since 1952 when it traded at $6.42. Ford hit a low not seen since 1985 at $2.77.

With all this turmoil in the markets, you wonder who is buying. Well, Bank of America has just sold a bunch of its stock in the markets to raise $10 billion in a effort to help with the Merrill Lynch takeover.

The FED cut the federal funds as well as the discount rate by a half a point to 1.50%. Central banks in Canada, Seden, UK, Switzerland and the European Union have also lowers rates, even though some were worried about inflationary pressures.

Finally, what would a day be like if we didn't talk about oil prices. Today, oil hit $86.05 a barrel. Some members of OPEC (Nigeria, Iraq, Iran & Libya) have been making statements to the press that OPEC may have to adjust the supply in order to help the current markets. Their statement effectively said they feel $90 a barrel is fair value and any sustained level below that will cause them to cut supply. Saudi Arabia has not said anything on the matter. Saudi Arabia is the biggest U.S. ally in the region.

Market news

Well, oil is still hovering around $103 a barrel, which is significantly lower that where is was this summer.  You would think my pump price would not still be $3.96/gallon (up $0.25 in one day!).  Well, the speculation is with Ike heading toward Texas, there could be some supply interruptions from that area.  OPEC announced it will have a "modest cut" in production, but experts still think the crude prices will be lower in coming months.  Apparently just not in my neighborhood - we will see!

RIM (maker of the Blackberry) has a new product - flip phone version (Pearl 8220).  Apple has come out with two new products (or should we say to updates to existing products), with its new iTouch and new 4th generation iPod nano.  A little more storage capacity, some colors choices, and enhanced capabilities are what are in store for anyone entering the fray for the first time, or to get that "other" device.  RIM is going to move away from the flat, touch screen type of product, where Apple intends to focus its development in that area.  I think I can see Apple's product focus, the Shuffle for small, portable tunes - the Nano for more storage, photo, video possibilities in a portable, small package, the iTouch for those that want all the bells and whistles but already have a cell phone, the iPhone - does a bunch of stuff (though some may say it is limited in storage), the the classic iPod which will only be available in 120 GB models is the multimedia storage portable device.  Which company makes the better long term investment?  I don't know.  I do think the record of Apple speaks for itself, though it is hard to make up that type of growth year in an year out with new products, software, extras (iTunes, App Store, etc.).  I think the big worry there is what happens when Steve Jobs decides to step down.  Is there a secession plan???

The U.S. Markets rebound a little today, though European and Asian markets continue to fall.  Recession woes seem to have turned to inflation worries.  If this is the case you want to be in short bonds (as rates would be projected to rise) and away from "trendy" type stocks unless they have a great story and look at "staples" (defensive stocks) until the election on November 4th.  That is one conservative strategy (though there are some sitting on the sidelines in cash - waiting for the right time!  Coca-Cola has made a $2.5 billion offer for the China Huiyuan Juice Group.  This Chinese company was said to have a 44 percent market share, so Coke is getting a great foot into this market in a big way!

Markets - what is happening!

Apple is expected to announce good results for the third quarter!  I was finally able to get into a store that had the new Apple iPhone 3G!  So, I have added to the revenue stream in my own small way!  

Drug companies are being looked at for possible mergers and takeovers as Roche offers $44+ billion for Genentech!  Merck and Schering to report 2nd  quarter earnings today!  Drug companies may be the hot ticket right now.

Crude Oil remains under $130 a barrel, so why is gas still $4.25 a gallon at the pump????  It is amazing how quickly it can go up and how slowly it can drop down!

S&P ETFs are getting a lot of interest right now as investors worry about individual stocks and would rather gamble on a pice of 500 large companies to show when the turn around happens!