Does the financial media have you scared yet? I have to admit, I enjoyed
yesterday's sell-off, and I particularly enjoyed all of the glum faces on CNBC
this morning. I'm not saying this to be snide, but this is the type of market I
have been waiting for since the beginning of 2007.
Yesterday, after the market closed, I went to the gym and watched the
financial channels while I was torturing myself on the stair-climber. As I
watched numerous TV screens, CNBC's Fast-Money gang was debating the 500 point
drop, and on Fox, Neal Cavuto played video clips of the Great Depression.
While the media was scaring investors, Bank of America went on buying spree
by purchasing Merrill Lynch . It reminds of the movie "It's a Wonderful Life".
Remember Mr. Potter?
BAC is Mr. Potter, and Potter isn't selling, Potter is buying!
Frankly, I feel like a kid in a candy store. As I watched my quote monitor
yesterday, I was saying to myself, "Oooh that looks nice , I'll have one of
those, Give me some of that". The market is getting into a range where each new
purchase excites me again. This hasn't happened since 2001-2002.
The key to not being disappointed in markets such as these is to make
purchases in incremental stages between now and the end of the year.
In my opinion, Wall Street is finally taking the beating that they long
deserved. They created the current mess, and now they are reaping what they
sowed. Alert investors read the handwriting on the wall three years ago
when;
1) The Bankruptcy Laws were Changed (October 2005): While
consumers were up to their eyeballs in debt, the financial lobby convinced
congress to pass "The Bankruptcy Abuse Prevention and Consumer Protection Act of
2005."
On May 31, 2006, I said;
If you don't believe the consumer is in financial trouble, all you have
to do is remember the "Lending Tree" commercial where a guy mowing his lawn says
he has all of these possessions because I'm in debt up to my eyeballs."
I don't know how all of this is going to shakeout, but its not going to be a
pretty picture. In the months ahead, many real estate speculators are going to
have to go to closing on their real estate speculations.