enigmaman

The Entry Point Market Investors May Be Missing

You said about cost cutting measure "This has become an issue for many market observers that note that earnings beats have been driven by cost cutting as opposed to top line demand. This may not be as large a problem, however, if even a mild recovery occurs."

So if a company that cut operating expenses and cut 75 of their 100 employees they can be profitable in the long run even if the recovery is anemic at best. That is a given, the question is what do the 75 employees to do that have lost their jobs, as well as the ripple affect that will happen all the way down the line. I mean its not just the one company doing this its all. So if you run this plan out, if all contract to become profitable that will put a lid on our economic growth. It appears the the Admin is coming to terms with this new normal, high unemployment, lower wages, less consumer buying, etc so how does that figure in to stock values going forward, at some point all this will have to be discounted because while so many want to believe we will return to business as usual and they have the charts to prove it Im not convinced the admin sees it that way, I mean P Volcker has told the President that " he should not count on the consumer coming back as many expect" that being the case all the old charts have to be modified to reflect what could be the new normal, is that reflected in the market, doesnt appear to be.

Closing Update for Friday, August 21: New Highs for 2009

Im one of the the market rally doubters to my own financial peril, found to many reason why I shouldnt and not enough reason why I should believe this rally was worth my money,

" A mind all logic is like a knife all blade, it makes the hand bleed that uses it"

Sometimes its true 2+2 doesn't always equal 4