Too Much Dr. Phil and No Perspective Makes Jack a Very Dull Boy- John Whitefoot for Peter Leeds, Inc.
TORONTO, ON (RUSHPRNEWS) September 14, 2007- Yes, there are occasions, on certain afternoons, when I turn in to watch the shenanigans on Dr. Phil. Not that I have any problem with Dr. Phil, I rather like him. Naturally the most entertaining part is his guests; those affable people who claim they want calm in their lives.
For some reason or another, instead of calm, they all actively seek out stressful situations. Though I suppose thatâ€™s why theyâ€™re on his show. I think Wall Street and some investors could be regulars on Dr. Phil. Not because some crazy neurosis is winding its way through the hallowed halls of the financial district. I think investors, despite their pleas for a nice rally, love to see the markets under some sort of stress or turmoil. So one has to ask, are our daily fears justified?
Since the beginning of 2007, investors have been in a tizzy over the one day plunge experienced on the Shanghai Stock Exchange, the credit crunch, the jobless rates, rising oil prices, and interest rates (to name just a few).
In late February the emerging Shanghai Stock Exchange tumbled 9% in one day; acting as a catalyst for a sell off on established exchanges worldwide. Eventually investors realized that a one day dive on the Shanghai Stock Exchange is of little international consequence. Especially when you consider Chinaâ€™s economy is only one-fifth the size of the U.S.
In June the Shanghai index fell over 8% in a single day. This time, the North American markets barely took notice.
In August, the buzz word was subprime mortgages, or the â€˜credit crunchâ€™. In a credit crunch, it becomes difficult to borrow money; unless youâ€™re a corporation or person that can pay off a loan. For you, banks can always find money.
Following fears of a credit crunch, world wide markets tumbled; but soon regained much of their ground. In the end, Augustâ€™s market meltdown had more to do with flagging investor confidence than economic fundamentals. “It appears that this credit crunch may not be as bad as some people thought,” one money manager said recently.
This week, the monsters-in-the-room are oil prices and employment. Next week it’s the meeting of the Federal Reserve.
Oil prices surged to record highs of more than $80 a barrel this week. Why? The U.S. Energy Department said oil inventories were down 7 million barrels and below last yearâ€™s level. The EIA (Energy Information Administration) however noted that U.S. inventories remain above average for this time of year. â€œI donâ€™t think supply and demand fundamentals justify the price,â€ said one Houston analyst.
The rise in oil prices, which could put upward pressure on inflation, comes as pressure mounts for the Federal Reserve to lower its short-term interest rate, in an effort to restore confidence in the financial markets.
With little other economic news expected this week, penny stock trading is likely to remain quiet, as it was on Wednesday. Many investors are holding back from any major moves before Tuesdayâ€™s meeting with the Federal Reserve.
â€œWe are lucky to be at a stage of capitalism when we have a Federal Reserve, led by Ben S. Bernanke, and Alan Greenspan before him, that will stop a hysterical market meltdown that is not based on fundamentals,â€ noted Ben Stein.
In other words, itâ€™s all about context and perspective. Two ideas that can be overshadowed when it comes to stock market jitters.
Thanks to a number of (seemingly) daunting flashpoints that cross the newswire, long-term perspectives appear to be in short supply.
And the fact is, those who have kept their cool learned that the good gets tossed out with the bad in the stress laden whirligig that is Wall Street. And for penny stock bargain hunters, thatâ€™s great news.
ABOUT PETER LEEDS:
Peter Leeds.com is a leading North American source of penny stock picks and market research, with over 12,000 paying
subscribers, including many investment professionals.Â Leeds has achieved an unparalleled reputation for clear, unbiased research,andÂ has been featured by theAssociated Press, NBC, CBS, and CNNfn. His proprietary Leeds Analysis process is described as a combination of fundamental and technical analysis that allows him â€œto identify stocks from well-run companies, those that haven’t yet been discovered, and companies with great upsides. With Leeds Analysis, he also avoids companies with any warning signs, such as weak management, decreasing revenues, or high debt.â€Â Leeds regards only 5% of penny stocks as having real investment potential, and from this group selects only two per week for recommendation.
PETER LEEDS INC.
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