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Fed- my take


Guest Dazel
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Guest Dazel

 

 

I watched the CNBC the last couple of days...rare for me...funny watching everyone talking their book! I watched the FED statement...saw all of the different takes...and the market drop of 200 points in case someone missed it. thinking that I would have more time I went for a run...here is what I came up with.

 

This 2013 pledge is a pure housing play...it plays directly into Buffett's playbook...it is the same type of thing that started the housing boom...he is trying put a bottom there. When housing comes around so does the economy...that is the U.S play...the dollar will drop and manufacturing will be helped as well. The world is slow enough that economy can grow before we have $120 oil again...hopefully.

 

The side effects....when the market was down big...one of the cry babies said why would we buy stocks 

if the economy is so bad...Bill Gross "because they have almost twice the yield of the 10 year U.S treasury!" you name it..JNJ, DD, all the Canadian banks...these names were dancing like sugar plums as I finished my run...free money I thought....

 

I took too long on my run obviously about 600 points too long! sometimes the market is quick. Nice call Eric...you are becoming a regular Marc Faber!

lots left to run...as "things will be where to be again in the market"...from housing to coal to gold..there will be a massive search for yield as well..good luck to all.

 

Fairfax told us so...I hope they cash in on the biggest move in U.S Treasuries in history

 

Dazel...

 

 

 

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Is anybody else thinking that lowlowlow interest rates (and a potential for inflation) would make a person more willing to invest in companies with a ton of debt? SVU and UWN seem to be pretty good plays to me, especially since they are both minting money, have a nice bit of leverage, and should benefit from lower interest rates. In both cases, they don't really have to refinance their debt, as they should both be able to pay it all off... but, the option to keep the leverage (or get better rates on it) seem to be nice options.

 

Any way, it seems like a good way of magnifying returns to me, especially when you consider that the Fed is saying that interest rates will be virtually zero for at least 2 years.

 

With this said, I still wouldn't want to do much with a company if I thought they would use a ton of debt to do a stupid acquisition.

 

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