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  • Association for Investor Awareness - Week of 12/18/2008

    In This Issue:

    The Economy Is Bad, But Stocks Are Priced For Worse
    Stocks Outshine Their Competition
    Behold The Halo Effect
    A January Bounce Seems Likely
    Energy And Foreign Growth Are Positives
    We May Be Halfway Through The Economic Downturn
    What Everybody Knows...
    The Bottom Line This Week

    Last week we received additional signals that a bear rally is probably in the works. During the five day period, investors were treated to a smorgasbord of bad news. Congress turned thumbs down on bailing out the Big Three automakers. Unemployment surged to a 26 year high. T-Bill returns dropped to essentially zero. Many bellwether companies issued earnings warnings. Several firms cut their dividends, and investors were shocked by a $50 billion hedge fund collapse.

    So what did the market do? It barely budged. The Dow eased down less than 0.1%. The Nasdaq actually rose 2.1%. The market was also strong during the first three days of the current week. In our opinion, such resilience in the face of disturbing economic events indicates that investors are probably getting ready to do some buying.

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