The sharp decline of the equity market has a precise, crystal clear message.
When a government takes over a company (and this is true in any country), the equity value of the company drops to almost zero. Look at what happened to Citi and Bank of America.
The relentless decline of the stock market is the reaction to the grandiose programs of Mr. Obama. Equity values go to zero because the profit maximizing activity of corporations disappear under bureaucratic control.
The ensuing slow economic growth will be a frustrating experience for this country. It has happened in Europe. We are heading in the same direction. Our animal spirit will fade as we seek safe government jobs.
The markets always win. They will offer new opportunities in specific asset classes. You just have to think differently. Meanwhile, follow closely transportation and financial stocks. They are providing exceptional signals.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes. To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/. You can review The Peter Dag Portfolio, free of charge of course. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
George Dagnino, PhD
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