Tuesday, July 22, 2008

What's Next?

The normal sequence from here is a sharp decline in commodity prices, a decline in inflation expectations, a decline in mortgage rates and the continued rotation from energy, utilities and basic materials. The ability of Wachovia to hold the bottom without seeking new capital indicates that the bottom in banks has been made. The drag from energy and related stocks may drag broad market indexes down but the bottom in a number of sectors will likely hold.

I will continue to steal a few moments to write over the next few days but company is coming. We have many activities planned. While I am "out of commission" be sure to buy all the non energy stocks you can. Take a look at Amazon. The Kindle reader seems to be gaining momentum. Books are delivered to these devices electronically with total savings ranging from 50 to 90%. The price has fallen to $349. The next generation will probably hold twice as many books and sell for half the price but real savings are being realized by heavy readers.