The Housing Crisis Explained

I've read many blogs and posts from individuals and "experts" about which stocks to buy and which sectors to get into. It is always important to be looking and watching and it is true that some stocks will do well in the near to mid-term future. However, anybody who has ANY money in the market, whether it be in index funds, stocks, mutuals, etfs, longs, or shorts, needs to do everything to understand the root of what is going on behind the scenes with this credit mess.

Otherwise people will continue to watch with jaw-dropping surprise as their investments in companies that never miss, companies like GE, expose the truth of the situation. That truth is that when companies that have businesses across every swab of the economy are screaming out that the fundamentals are weakening everyone should be perking their ears. The best other example is Warren Buffet's note to shareholders that business was slowing across all segments.

This is why this blog is so concerned with trying to understand the fundamentals of what is going on. I listen to people who are in the know, are in the business, who see what is going on a daily business. And also to people like Rogers and Soros who have been incredibly accurate in the past and are likely to know what they are talking about this time as well. I process the facts and the opinions and gather as much knowledge as possible to come up with my own take: one that is hopefully a well thought out, informed, and accurate.

Only if you understand the backdrop, at least to an extent, can you make proper decisions about what to do in this climate. Almost everything else, including the nuances of a particular stock or industry, will be influenced by the macroenviron.

Here is an excellent 30 minute slide show that helps to provide an understanding of the situation we are in. It's only one part of the picture but it is very helpful...

http://www.tickerforum.org/cgi-ticker/akcs-www?post=38857


BTW: Regarding DUG I am not in it at the moment after getting stopped out but I have not given up on it by any means. I've re-examined my position and my conviction is as strong as ever that oil stocks will fall. The high oil prices actually hurt refiners. Also, the speculative bubble in oil will very likely burst when it is clear that the Fed is done cutting rates and/or OPEC raises production and/or people realize that half of the oil in the US now comes from Canada and/or a slowing global economy shows any effects of slowing demand not only in the US but around the globe. That's a lot of and/or's for oil to be at its peak.

However, prices typically go up before the summer and the momentum is high. The timing may be still too early. Also there are other shorts such as SKF, SRS, that on dips are good buys. Therefore I am looking to re-enter DUG with a very small position. I will watch it for more.

TWM: I took profits and sold half of my position at 81.40. I am looking to re-enter CMED with a small position if the price goes too much lower. Zack's rated it a top pick which will likely create buying interest on even neutral market news. Zack's rec on MA at 180 has done well as have many others short term.
Current position: TWM only.