As we have remarked previously, the economic world is gradually recovering and normalizing. Crises come and go but the trend is recovery and the market long ago decided that we are in a recovery.
The latest crisis is Ireland. The one before that was Chinese inflation. The one before that was poor numbers out of the US, The one before that was …….. And so on. Yet gradually the bumpy road moves inexorably toward recovery.
The world at the start of this week was going to collapse because of the debt crisis in Ireland. There were a few down days in the market but nothing of significance. The talking heads talked of gloom and doom.
I thought to illustrate the point and convince readers not to follow the doom and gloom crowd, I would quote a few headlines from today and yesterday.
Nov. 25, 2010
Wall Street Journal – European Markets
European stocks advance; (Ireland falls again)
Nov 24, 2010
NEW YORK (MarketWatch) — U.S. stocks rallied in thin pre-holiday trade Wednesday, reclaiming ground lost in the previous session after data cast an optimistic light on jobs and consumers as holiday-shopping season begins
Nov 23, 2010
New York Times – Corporate Profits Were the Highest on Record Last Quarter
The nation’s workers may be struggling, but American companies just had their best quarter ever.
American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or noninflation-adjusted terms
Nov 23, 2010
Bloomberg – European November Services, Manufacturing Growth Unexpectedly Accelerates
Growth in Europe’s services and manufacturing industries unexpectedly accelerated for the first time in four months in November as companies weathered the debt crisis and cooling global growth
The Economic World is Recovering
I hope this assortment of headlines and news is self-illustrative. I remind the reader that investors’ fears usually keep them out of the market until they are confident that the market is stable and there won’t be another big fall. That confidence normally returns after the market has risen for long enough that a real danger of another fall is starting to return.
Then the innocents return to the market, make some money on their investments, gain more confidence, the market rises, more money is made and the market rises some more and gets a bit frothy, and then BANG – the market collapses. How many times does this have to happen before advisors smarten up their clients?
The Time to Invest is NOW
The Place to invest is in junior commodity stocks that have strong growth potential.
Companies that are proceeding towards actual mining operations on proven deposits.
Companies that have discovered very good deposits that haven’t been fully proven yet.
Companies that are really good but the market has ignored.
Companies in stable places in the world.
Companies with stable and proven management.
Companies that don’t have strange share structures or other aberrations that allow shareholders to be denied their rightful share of profits.
Don’t be fooled by cautions against so-called penny stocks. Look for real value. Never gamble on tips or on penny stocks that don’t have a clear and understandable and measurable value. For a real value stock to be discovered can mean a major increase in the value of your investment. Large cap stocks, with many exceptions, don’t double, or quadruple overnight.