We've had V shaped recoveries twice this year (Jan-Feb) and (Mar-May).  Both times were solely due to aggressive fed-cutting.

Ever since the fed say they won't cut no more starting in May...the markets have been rolling over.  Financials are down and average of 25% or more, oil has surged to 140 and now tech stocks have been getting slammed.

There is value out there if you know where to look.  I think the sell off in Monsanto, Syngenta and Agrium may have been over done.  They are trading at reasonable forward p/e right now...and they have done nothing more than crush estimates every quarter.  I am always wary of Mosaic, CF Industries and Potash because of their beyond wild gyrations in price.

Western Digital and Seagate are being priced like they are lumber companies.  Trading at single digit forward p/e, they are an absolute bargain at these prices.  I don't care if the global economy is slowing, everyone needs disk space at an incredible growing rate.  These two companies are a duopoly and have pricing power (Samsung and Fujitsu are too small of players).

Financials...have been value traps over and over this year.  Since the aquisition of Countrywide, Bank of America has been beaten senselessly for over 22 points.  Everyone who has previously shorted CFC simply moved on to BAC.  BAC is now loaded with ungodly amounts of ARMs, Subprime and not to mention massive credit card debts and the now detiorating commercial real estate debt.  I would be hesitant to short at these levels because this stock could bounce 5 pts like Lehman Bros does, but I would short right when that bounce ends because this stock could end up in the teens.

HSBC Holdings is a global banking behemoth with exposure to over a 100 countries.  Yet their stock has been relatively unscathed.  They are deep into subprime and credit card lending, but their heft has so far given them a bye.  But with Wells Fargo and Bank of America starting to crumble, I would expect a fall on HBC, beyond what we had already.  If BCS and UBS are doing so bad, how is HBC doing so well?

We have so many financial stocks all but finished...Ambac, MBIA, PMI Group, MGIC Investments, Radian Group, BankUnited Financial, Corus Bankshares, National City, Washington Mutual, Indymac Bank, BankAtlantic, Triad Guaranty, and many more...have these failures already finished trickling down or is this just the beginning.  Throw in the potential bankruptcies of Ford, GM and all the airlines...the credit problems may have not peaked.  It's a scary world out there.

In this era of uncertainty I would like to own stocks that make tangible goods.  Like gold, drilling for natural gas, making seeds and fertilizer, making hard disks, making iphones and owning pipelines.

When companies like AIG, Wachovia and Lehman Bros don't even know what is on their balance sheet, why should you own their stock? 

Bookmark It!

Financials have always been a smoke and mirrors game. Making money out of nothing through speculation, buying other peoples debt, moving money around, exchanging this money for that money, all with no actual product in sight, aside from the occasional bottle of snake oil. If there was ever a bubble bursting scenario, the financial industry has just blown up sky high. The fact that financials are so entrenched in everything we do, including tangible products, explains the overall sh**ty economy we have before us. It also means that the 'fix' is going to be a long time coming.

Ow, I cut my hand trying to catch that falling knife! I agree that a V shape recovery is unlikely. We are entering earnings season, and there will be volatility in individual shares . Nvidia makes things, and they got slammed on lower guidance. I'd be very conservative right about now. The fed can't go any lower, and all the rate cuts did was stave off a market crash. The market has gone down since the fed begain cutting. Same thing happened in 2000-2002. Fed kept cutting, market kept dropping. It's no shame to be in cash. Making 2% is better than losing, and sleeping is easier.