DollarTalk

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

I am very thankful for the blessings that I have in my life. Now, regarding the market, the power of optimism never ceases to amaze me. In fact, we are missing a very large component of our view on the market and the economy in larger view when we discount the role of perception. Most of this market volatility was brought on by increased uncertainty and the perception that our credit crisis and financial difficulties were beyond our ability to solve as a free market. This, of course, was exacerbated by the media and capitalized on by the media in order to accomplish the election of now President-elect Obama. Now, the media has their man and would do well to continue to promote positive, uplifting views on the future direction of the economy and the solutions and people proposed by President-elect Obama. Otherwise, they will find themselves in the company of the Republican party when the public develops a pessimistic or negative perception of the new President and his leadership team. That's all for now. More on my blog.

The Dow's Lost Decade

While I believe that information technology may be the hope we have for a good return in publicly traded companies, I'm honestly beginning to wonder if the optimism of Mr. Wilson (and others like him, including myself) is part of the problem in the financial markets. The general public does not share the optimism, nor have the character trait of optimism, that entrepreneurs, venture capitalists, investment managers or plain old stock brokers have. There is a required level of optimism that is higher than the general public in order to be successful in business.
I realize this is more of a social observation than investment observation, but I'm beginning to believe that this has impacted our financial markets more than anyone anticipated and will continue to do so. This may mean that the best places to invest our excess capital will increasingly be private equity, rather than publicly traded companies, especially if the trend of distrust continues against Wall Street, et al. This will be a positive for those taking the risk in their own businesses, but a negative for the publicly traded markets, while the risk of private ownership may actually begin to decrease. We need more entrepreneurs in this country anyway.