Friday, December 03, 2004


Wow! How fast can a market be? Yesterday morning, I wrote in a blog titled STOCKS HOT ON OIL BUBBLE BURST that

In a very short period of time, the big problem for the market will be the
concern that the economy is growing too strong! The concern will be that a
strong economy is inflationary for the cost of goods and for interest rates.

The featured article in this mornings newspaper business section said
ECONOMY IMPROVES--mortgage rates rise on inflation fears

at 9:30 this morning the Government Jobs report was dramatically weaker than expected. The market response was swift. The futures contracts for notes and bonds jumped quickly as interest rates fell; the US Dollar Dropped; the price of Oil Dropped again! Oh my! Ain't it awful!

In the mean-time, the market just keeps humming along. A few days ago, I said that you should not get too concerned about analysts complaints about INTC and semi-conductors in general. I stated my preference for TXN but I suggested that INTC will prosper in the coming computer upgrade cycle. Late yesterday, INTC raised its guidance and the stock and the QQQQ's are off to the races. It is now close to 11 am, the market is fighting resistance but INTC is still up $1.48 and the QQQQ's are up another $.09.

In a few days, I hope to post my top ten rules for investing. One of the rules
Bad News is Good News
is demonstrated in the sequence of events described above. Sometimes the rule is Good News is Bad and sometimes it is No News is Good News but most of all it is
Do Not Over-React to the News.
We are in a Bull Market! Ride this bucking bronco for all it is worth and don't get weak kneed because of a news story that can change in a flash.