Wednesday, November 7, 2007

Assessing the Tape

Volatility continues to be a key theme. Media sentiment continues to be on the bearish side, which helps further a case to be bullish. A lot of the negative news is priced into stocks already. By now, almost everyone is expecting poor results from the big banks. So if we get no news, or just slightly better news, things will improve. Economic numbers continue to come in steady, so there isn't any reason to jump ship on the overall economy. But nonetheless, the volatility is shaking a lot of people out of the market.

I think oil prices are going to come down. The overall trend is for them to continue a climb, but when the frenzy wears out, I think we'll be heading a little lower there.

With new economies growing and becoming more competitive, I'm always trying to look ahead for the next frontier of investing. This is easiest by looking at commodities. One that has intrigued me lately is water. I know it has seemed to be a little bit of a "hype" play, but there is a pretty good case in the next few years. Although accessible water isn't a problem for many people in the U.S., it is in certain parts of the world. And it isn't just drinking water, it is infrastructure companies that put pipes in for farms and companies. A lot of water systems are becoming privatized as well. I wouldn't but a specific company to profit from this, but an ETF is a great way to get some exposure. I've studied the few that are out there, and my favorite is Claymore's Global Water Fund (CGW). The have exposure to various water and infrastructure companies in the U.S. and throughout the world. I like this as a long term play.

Beyond that, I'm still looking for more buying opportunities.

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