Sunday, November 13, 2011

The Week Ahead

As last week's volatility showed, it takes a great degree of intestinal fortitude not to panic over short-term market movements. Any long investor who panicked at the beginning of the week and bailed, would have regretted it by the end of the week. Inversely, any who went short early in the week, would have also regretted it on Friday. Doing nothing turned out to be a good choice.

But, instead of writing a weekly wrap about the extreme volatility of last week, I thought I'd focus on the what I expect this week.

As anyone who follows the markets knows, they've been very reactionary lately, moving in extremes based only upon perceptions of economic uncertainties overseas reported by the news media, which has a way of perpetuating fear to serve their own agenda. However, like I said before, there's no way the Fed, the European Commission, the IMF, the bankers or the politicians in their pockets are going to allow economic failure anywhere for now. Failure is not an option.

And now that the fears surrounding the Grecian and Italian economies has been somewhat calmed, I don't see anything on the near-term horizon to hold back the markets this week. I'm still holding long, and expect this week to end on a largely positive note.

But, I say that with a small degree of uncertainty because the robber barons can easily manipulate the news reports if it serves their purpose. It goes without saying that if one looks for problems, they can always be found. And, as recent volatility in the markets has shown, the herd mentality is easily manipulated. Markets can turn on a dime.

So keeping that in mind, while I believe we will see gains for the week, one should always approach a running bull with a certain degree of caution. Not only does perceived fears often get us in trouble, but excessive greed has the tendency to do the same. Don't allow that greed to leave you in the hole.

Short Film 'The Black Hole' from PHOTOPLAY FILMS on Vimeo.

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