Are we there yet?

Expectations are quite low when the new "up" is "not down 500", according to CNBC. Well, I guess today was a down day then. The only solice perhaps is that trading days are looking very predictable. 

I had to break open my history books to compare this bear market to past bear markets and my research suggests there is a light at the end of the tunnel. I believe (in the minority) that the credit crunch is predominately behind us. Now the mop up is a totally different story as we keep seeing various financial institutions fall under the weight of their own balance sheets. These things always go in cycles and history suggests we are not in a unique spot just yet.

The government hasn't started spending on their shiny new 700B credit card yet. When they do, it appears that some of the money will be put into the markets directly and such a move will definitely help. Another interest rate drop appears on the horizon which should help some. While the dollar typically cringes at rate drops, our peers are dropping faster which means the dollar is being held up (nice hedge, see my previous blog about UUP). The doomsayers are in full force regarding some major tech earnings announcements next week but such announcements are usually backed into the prices ahead of time which suggests that we probably are near the bottoms from a P & L perspective (IBM was a nice surprise). Some industries appear to be slowing but not tanking like those tied to the financial markets which suggests, again, that the broader index should be nearing the bottom of this mess. 

So maybe we've hit bottom, and maybe not. Regardless, the bear market WILL end at some point, and the bounce off the bottom WILL be notable. As mentioned in previous blogs, diligence will find some nice bargains in the market and a dollar hedge isn't a bad side bet. The business develepment funds like MCGC and AINV have gotten their heads chopped off and while the prices look incredibly bad, their investments don't seem to be going south as fast as their own stock prices. The credit squeeze held up their ability to make new business, but if their performing assets can provide enough cash, they should see it through the storm.

Don't sell!!! Hang tight, buy good value shares if you have the ability, and look forward to next year.