Focus Advisory

Bill Miller on This Tough Market

What a bunch of pessimists

Financials have bottomed...They may drift down from current levels and stay flat in order to absurb their massive dilutions, but they have bottomed.

Housing has been dropping nationally for two years. It was reported this week that seven major markets saw month over month price increases. Las Vegas, Southern California, and Miami, which saw declines of 25% or more will not see prices fall another 25% from current levels. The stock market will anticipate this recovery.

European institutional investors, who have seen their currency double against the $US since 1998, and their stock markets outperform the S&P 500, are salivating at the mouth to buy dirt cheap $US denominated stocks. We're beginning to see this in M&A activity with buyouts of BUD and DNA.

Sovereign wealth funds are loaded to the rim with petro dollars and will continue to reinvest those funds into the global economy.

BRIC countries have $2.5Trillion (Yes Trillion) in reserves. Their economies, while slowing, continue to grow at a blistering pace. If their economies were to slow dramatically they have the capital to invest and grow their way out of a slowdown.

Oil did reach $150, but that spike will lead to the biggest tech boom the world has ever experienced. The tech boom of the 90's was driven by the U.S., Europe, and a few developed Asian economies. The coming alternative tech boom will include all of the above and China, India, Central & Eastern Europe. Once the capital, expertise, and energy of Silicon Valley is behind a trend, there is no turning back.

Finally, global markets are off more than 25% from their highs. If you cannot look forward through this market to see the opportunities after a 25% global correction you never will. Don't expect a major move in the market prior to the U.S. election, but come November have your seeds planted for a significant 4th quarter rally.