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Investors Shun Stocks

Monday Oct 3, 2011

October is the worst month of the year for stocks. 1929, 1987, and 2008 all experienced October meltdowns. The 1974 low was delayed until December. 

Investors have fled the market no doubt fearing the worst. Is there worse to come?  I have been commenting in class that this will be an interesting semester to study accounting, and it has certainly shaped up that way. Gee BRK.A and BRK.B both at book value and no one but Chairman

Buffet is interested.  I am a bit conflicted. My guess is that we are due one more rally before an October low.Come to think, it would be interesting to construct a chart  of BRK at its current versus book value price.  But Mr. Market could trick everyone now that so many are out of the market. 

Note that all market lows happen amidst gloomy news. This time it is the sovereign debt crisis in Europe as well as banking and mortgage and state debt woes here. 

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4 responses to “Investors Shun Stocks”

  1. Valentin Tristan Jr. Avatar
    Valentin Tristan Jr.

    Look out below!!!!
    Next stop 8700 for the DOW

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  2. Phillip Garcia Avatar
    Phillip Garcia

    I believe that any governments, local or national, should not borrow any money or create bonds. What happen to the credit checks, like they do for a person who buys a car? The small local banks do credit checks on people they give loans to. I thought that big governments are supposed to be smarter. But it seems that they are not. They don’t bailout the small businesses, why should we bailout big government, like the Greece. These mismanaged big governments are taking down Wall Street. Stop the borrowing! No revenue, NO spending.

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  3. Luis Martinez Avatar
    Luis Martinez

    I just don’t see a pleasant way out of all of this debt. This debt has been building for decades. At some point, the gravy train is going to crash and I fear this generation will witness it. It could lead to a completely different world. My thoughts are, if you’re in debt, get out. Those who represent us need to know how we feel about debt (from city to state to federal levels). If you’re spending more than you bring in, stop it. If that means certain programs suffer, make the decision and stick to it. Otherwise, money will become meaningless.

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  4. Dennis Elam Avatar
    Dennis Elam

    But politicians run for re election Phil!
    And so commitment to principal is out the window, they are committed to votes
    The Constitutional Convention never envisioned the professional politician

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