Wednesday, February 28, 2007

The Day After

Yesterday was really something! The Dow ended down 416 for the day. By far the largest I remember seeing. It really is interesting to see just how quickly the markets can move when people are scared. I mean, the market cap/value of companies was decreasing immensely. It was all sparked by a correction in a red hot Chinese market.

The big debate is whether this is a buying point, or are we headed for rough seas? My advice is wait it out. The way we traded today (Up 50, down 50, up 100, down to 0, up to 90, back to up 50 for the close) shows a lot of volatility out there.

If you are itching to buy, rotate into the defensive stocks. Altria(MO), Proctor and Gamble(PG), Coca Cola (KO), Chevron(CVX). Jim Cramer is pushing Caterpillar (CAT) right now pretty hard, as it has taken a hit with construction down. They have a huge stock buyback and a nice dividend. I see it as somewhat dead money until the second half of the year, but hey, slow moving dividend payers are way better than what we saw yesterday!!!

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