Wheeeee!
Hey Folks,
Just a quick post this morning. Most people watching the markets this morning are probably frantically pushing the sell button. I'm just popping on the record today to say, take your hand off the sell and start thinking about holding it over the buy button.
I don't think we'll see the markets turn up immediately, but we've displaced more than just the speculative inflation that follows most common stocks (a la Ben Graham). People are freaked and your best short-term investment is probably the VIX (options volatility index). I'd also suggest snapping up some longterm corporate bonds - anything with a spread of >5% from US Treasuries or LIBOR. Global inflation's going to be a bit higher in the future, but it's unlikely it will rival the ~10% coupons that some stable corporations are offering right now.
We're on the precipice of a crash, so avoid irrational moves and wait 'til after to take major stakes. At the latest (least risk), we'll see Congress step in with new legislation - likely after the new President takes office next Jan. - to clean things up (eg. CDOs, CLOs, and SIVs) and make sure it never happens again (yeah, right...) Just as Sarb-Ox tried to spit-shine corporate accounting in '02.
Them's the news. So for now, ride the crash down (or step aside and let it crash), then look to ride the rally back up!
Happy (deal) hunting!
-A