Showing posts with label bernanke bubble. Show all posts
Showing posts with label bernanke bubble. Show all posts

April 16, 2008

"Goldman Sachs and Wells Fargo warn 'delusional' investors on stocks." So what's your portfolio looking like today?


So what's your investment portfolio look like today?

On stocks, are you a bull or a bear?

I'm neither. I'm still into "asset preservation" and currency diversification. Commodities, food, oil, foreign markets, multinationals, dividend payers, foreign currencies, gold, silver. Knowing Bernanke is doing all he can to start a new bubble somewhere (hint - it's already well underway) while destroying the dollar.

Some companies are going to be going away these next few months, others will see their stocks continue to get pummeled, while others will do just fine. And there's a LOT more surprises to come.

I have one word for this market: Dangerous. Invest carefully. Read Crash Proof. Read Manias, Panics and Crashes. And don't put all your eggs in the US dollar. Cash is King - but cash comes in many forms, not just Bernanke's US dollars.

Wall Street faces the growing risk of an equities bloodbath in coming months as the credit crunch spreads to the wider economy and earnings crumble, according to a pair of grim reports issued by Goldman Sachs and Wells Fargo.

David Kostin, the chief US investment guru for Goldman Sachs, expects the S&P 500 index of Wall Street equities to plummet a further 15pc over the "near term" as companies scramble to lower their outlook for this year.

"Although only a few firms have reported first quarter results, early signs are awful. We expect a swath of lowered profit guidance," he said in a research note published today, entitled 'Fasten Seatbelts'.

Mr Kostin, who replaced the ever-bullish Abby Cohen as chief strategist in December, expects the S&P index to reach 1,160, which would amount to a fall of 27pc from the bull market peak of 1,576 in September and enter the annals as a relatively severe bear market.

Scott Anderson, chief economist at Wells Fargo, is equally pessimistic, describing the bullish views of some market players as "bordering on delusional".

"The equity markets have not yet priced in a prolonged downturn in economic growth in my opinion. We are still in the early stages of the credit crunch. Earnings estimates for the second half of the year are likely still far too high," he said.