Welcome to the "Post-Wall Street Meltdown (PWSM)" world of investing. It feels like "the eye of the hurricane" after we were leveled by the the front-end of this "perfect storm."
It is hard for us to get our brains around how many stocks that used to be considered "financially sound, cash cows, fundamentally solid" have dropped 80%, 90% or even more. Many are still in denial about the severity of this "investor's nightmare" ...a nightmare that we wish was nothing but a bad dream, but was actually our reality over the past 18 months.
I reckon the "poster children" of this PWSM world of investing should be companies like General Electric (NYSE:GE), Citigroup (NYSE:C), General Motors (NYSE:GM) and Alcoa (NYSE:AA), all members of the illustrious "Dow 30 Companies"--the thirty companies that make up the superstar components of the Dow Jones Industrial Average index.
Then there are companies like AIG Insurance (NYSE:AIG), Wachovia Bank, Lehman Brothers, Bear Stearns and Washington Mutual, that are either completely worthless or worth just a few pennies on the dollar. It's awful and it's a national tragedy!
In the PWSM world of investing, yesterday's earnings and yesterday's valuations of a company's book value and balance sheet is highly suspect, to say the least. What any company can earn and claim to be worth in the pre-PWSM world and what it will be able to claim in the current PWSM environment should make us all want to rethink where we can confidently invest our money.
This might explain why average citizens all over the world are buying physical gold and silver as fast as you can say "priority shipping". It might also speak to why gold and silver prices might see new highs by next year at this time.
One early warning contra-indicator of how bad things really are is the 180 degrees turn that the federal government, Jim Cramer and a whole lot of "Goldman Sachs types" have recently performed.
Suddenly, in about a week's time, the economy has gone from being "deeply flawed and fundamentally unstable" to the spin we are now beginning to hear.
