What’s Next for This Crazy, Mixed-up Market
Posted by admin in Stock Market on November 26th, 2008
What’s Next for This Crazy, Mixed-up Market
September 26, 2008 05:21 PM ET | Katy Marquardt | Permanent Link | Print
If lawmakers cement a bailout deal soon, the market’s likely to see a bounce on Monday. But then what?
Says Mike Avery, comanager of the Ivy Asset Strategy fund: “I think we’re in a period where global growth—including U.S. growth—is going to be very slow for a long period of time, maybe for the next couple of years.”
Avery, who runs a fund that invests in a combination of stocks, bonds, cash, precious metals, and currency, says he’ll probably use the rally to get more defensive with “more gold bullion.” He adds that “the equities we’re sticking with I’d characterize as large-cap global brands—the Nestlés, Coca-Colas, and the Yum Brands of the world; companies that have clean balance sheets and the ability to self-finance through their own cash flow.”
He says investors seeking security might look to dividend-generating investments. Stock investors in particular should consider global brands with strong balance sheets and “products and services that appeal to the middle class,” says Avery, whose fund currently has 40 percent of its assets in cash, 40 percent in stocks, 10 percent in gold bullion, and the remainder in bonds.
Avery also said he thinks the market has reached a bottom in terms of ultimate panic:
“I think September 17 was the worst. To me, what stood out was that one-month Treasury bill [yields] went to negative. In 30 years, I’ve never seen that before. That’s like somebody saying they have so little confidence in financial institutions that they’re willing to take a guaranteed small loss, just for the safety of having their money in a U.S. security. That’s the ultimate act of capitulation…. We may get a rally, but that doesn’t mean the market goes up dramatically from here.”
![[Digg]](http://www.marketmixup.com/wp-content/plugins/bookmarkify/digg.png)
![[Facebook]](http://www.marketmixup.com/wp-content/plugins/bookmarkify/facebook.png)
![[Google]](http://www.marketmixup.com/wp-content/plugins/bookmarkify/google.png)
![[MySpace]](http://www.marketmixup.com/wp-content/plugins/bookmarkify/myspace.png)
![[Reddit]](http://www.marketmixup.com/wp-content/plugins/bookmarkify/reddit.png)
![[Technorati]](http://www.marketmixup.com/wp-content/plugins/bookmarkify/technorati.png)
![[Twitter]](http://www.marketmixup.com/wp-content/plugins/bookmarkify/twitter.png)
![[Yahoo!]](http://www.marketmixup.com/wp-content/plugins/bookmarkify/yahoo.png)
![[Email]](http://www.marketmixup.com/wp-content/plugins/bookmarkify/email.png)
The costly United mix-up
The costly United mix-up
An old bankruptcy story went online, causing an investor panic. The lesson? Information consumers beware!
September 15, 2008
Doesn’t this sound like a plot summary for an “I Love Lucy” episode? Somebody goes looking for information about airline cancellation policies late one night and stumbles across a nearly 6-year-old story about United Airlines filing for bankruptcy. That seemingly innocent act triggers a chain reaction that sends United’s shares plummeting, wiping out $1.141.14billion in value before the stock market halts trading. The mix-up is soon exposed and things return to normal, but the incident leaves United’s shares 11% lower than they were when the day began. That’s enough to prompt the feds to launch an investigation.
What happened to United last week, however, was a uniquely 21st century phenomenon. The mishap took place online, not on a soundstage, and there was no ditsy redhead to blame. Instead, it was a consequence of the Internet’s deep integration into the global economy. The snafu serves as a cautionary tale because it illuminates some of the hazards of this new era of digital publishing. Old information never dies, it just gets tucked away. Machines can gather, analyze and re-contextualize it, frequently without human intervention. And they can spread it at the speed of light, regardless of its value or authenticity.
Ads by Google
Bankruptcy Alternatives
More Than $15,000 Debt? Save 50% & Payoff In 12-30 Months. See Details
www.Freedom-Debt-Relief.com
File Bankruptcy
Move Forward With Filing Bankruptcy Complete a Free Online Evaluation
www.Chapter7.com
Don’t File For Bankruptcy
Advice & Alternatives to Bankruptcy Get Out of Debt -Free Evaluation
www.NationalDebtAssistance.com
In this case, the single viewing of the 2002 United bankruptcy article on the South Florida Sun-Sentinel site automatically promoted it to the site’s list of most popular business articles. From there, a series of machine-driven processes planted a fresh date on the story and pushed it onto Google News, through a South Florida securities research firm and onto a market information site operated by Bloomberg LP, where it launched an investor panic. None of this would have happened if, somewhere in the chain from the Sun-Sentinel to the Bloomberg site, a human being had been involved.
The incident prompted plenty of finger-pointing, but the solution isn’t to block Google’s software or stamp a date on every archived story. It’s for consumers of information to be more skeptical. And with luck, that’s just what episodes like this one will inspire. There’s a trade-off between speed and reliability, and as much as investors crave the former, they depend on the latter. The outlets that pass along bad information won’t hold their audience if they keep fooling the market.
