Seeking Alpha
Long only, growth, special situations, foreign companies
Profile| Send Message|
( followers)  

The time to buy has come. Do not head willy-nilly to the place where there is blood on the street, namely Thailand. But think about some other places that sound more troubled than they are, and some global players' stocks which are misunderstood.

Whitney George, Co-Chief Investment Officer of Royce & Associates figures that, by historical standards, investors are woefully under-allocated in equities.

Which presumably means they will now start buying equities.

Here is a note from Adam Carr, senior economist at ICAP (the Australian brokerage)

European markets had to digest the news that Germany had imposed short-selling bans, so equities were smashed. Of all the bearish influences flying around at the moment, regulation, or rather excessive regulation, is the one threat that I think is genuine. The other stuff - European disintegration, a Chinese collapse are low probability events.

They might make for interesting dinner conversation, but in my opinion if they are placed anywhere other than at the periphery of an investment decision, you are going to lose money on a 6-12 month view.

That said, I'm the one losing money at the moment, and I've been completely wrong about how long this bearish relapse could last (we're getting into our third week).

Angela Merkel, the German Chancellor, has not helped matters by talking about “dangers for the euro” and the need for tough measures. These will be cyclical, reinforcing the crisis, and poorly coordinated within Europe to say nothing about with the USA.

It was her delaying tactics which brought the crisis over Greek debt to a fever pitch in the first place. She is not a chemist like Maggie Thatcher was, but a physicist, which may be why she has a slower reaction time and makes silly remarks which add to the mess. Chemists are like micro-economists while physicists are macro-minded.

Carr resumes: I do remain confident this is transitory blip though. A modest correction in what will turn out to be a very aggressive bull market.

With Wall Street now at a 10% correction (even if it may close higher today) remember Gutele Rothschild. Gutele, mother of the famous five, was on her deathbed in the early 19th century when she was 99 years old. Her sons kept telling her she could rally and live to be 100. To which the old lady replied, "Why should God take me at 100 when he can have me at 99?" And she died.

Don't wait for an 11% correction. Settle for 10%.

Source: The Time to Buy Has Come