Friday, November 9, 2007

Let's Be Aware

Sentiment is getting off the deep end on the negative side. Considering the level of volatility taking place, its hard to blame anyone thinking that way. But we have to think differently to get an edge. While there are more credit risks, almost all major banks have reported their level of exposure so far. There could be further damage to come, but there also may not. One thing to consider is the possibility of short covering on the financial names. If this happens, the market will pop up fast, because the financials make up such large weightings in each major index.

Tech has also been selling off pretty hard. I think this is mostly people protecting their profits. Some tech names that have performed well are consumer driven, and with jitters in the economy and consumer sentiment, I can see where the worries are coming from. I still believe the consumer is resilient, and the Christmas season will still be pretty strong. There is a breaking point on gas prices, and how they could negatively affect the consumer, but we haven't reached that point.

Remember the words of Warren Buffett: "I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."

So where are we at with today's market?

Have a great weekend!

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