aarc

Hotels Are Blessed: Ignore the News

This is the economic crisis of the 21st Century.

And the recent panic sell-offs have consumed most if not all of the potential run down. There is not much left to the downside after SnP went down from 1576 to 666.
How many more investors will be willing to sell at any price this time around if SnP goes below 666?

Buy when the opportunity arises. With trillions of dollars of capital, you cannot be choosy on when and at what price to buy those distressed assets.

Fed buying anything and everything in late 2008 and into 2009 can be compared to an investor buying in 1931 to 1932 during the economic crisis of the 20th Century.

They can't buy solid assets at abysmal prices when people are not panicking. They can't be very choosy on which assets to buy either - otherwise they will be accused of many things other than that of preventing an irrepairable economic dislocation or helping the economy recover.

During this panic selling and "panic" buying, there are bound to be big mistakes such as AIG. But then we still don't know if AIG is such a big mistake or a great fortune.

No matter, Dow Jones went down from 470 in 1929 to 42 in 1932. Then went up from 42 to 14,200 of year 2007.

Which matters more, the 91% run down from 470 to 42, or the 34,000% run up from 42 to 14,200?

Fed is not going to die at age 70, or 100, or 200, or even perhaps 1,000 years from now.

The Fed , the Treasuries, and Fannie/Freddy buying more things (including the good, the bad, and the uglies) than everybody else will give them so much more power and control of how things are going to work out in the future.

The cynics and those not willing to take perceived massive risks will be left with little or nothing to hold on to.

Why is it that so many consider the risk as minimal when the market goes down by only 20% - and the downside risk so great when it has already lost more than 50%?

Fear is but normal considering the massive amount of bad news we have to digest last year.

Panic = an irrational behavior we went thru until March 2009.

That does not preclude more potential panics in the near future. Recognition of what we have done and should not have done can enable us to rationally face future panics by those with less fortitude.

Good luck everybody in the weeks and months ahead.

This is an excellent opportunity for those trend traders who know how take advantage of the short-term bear rallies and fake sell-offs but potentially a lifetime opportunity for long-term investors.