|
Investment Outlook
for April 1, 2008
|
Mark Meyerowitz,Owner,
Meyerowitz Investment Management
Mr. Meyerowitz has been
investing since high school, in the 1970s.
After graduating from Brandeis University in 1977; Mark
built up his small family business into a large local
retailing company.
From the mid 1990s to early 2003, Mark was a broker with
Smith Barney and with Edward Jones; two of the largest
invest firms in the nation.
Mark and his family have lived in West Orange, NJ since
1987.
|
"Recovery" Side of the Bear Market
It now appears as if we are on the "recovery" side of the bear market that has been in place since last summer. Recovery is not an easy process as there could still be news that unsettles the investment markets.
We need to step back and try to calmly analyze the causes of the bear market. First, we need to examine investor behavior. Hedge funds and other fast money types would leverage stocks, bonds, and commodities to the hilt. As the value began to fall, margin calls came in. This forced the money managers to sell, sell, sell. Whatever had cash value, they sold. Stocks, municipal bonds, commodities.... all underwent periods of great selling pressure. It didn't matter if it was a good holding or not. If it had value, it was sold.
What started this frenzied leveraging of assets? Our old friend Greed did it. Greed as created by builders and mortgage brokers who figured out "clever" ways to get people into overpriced homes that they could not afford. Combine that with the greed of Wall Street- taking these junk mortgages, packaging them as secured "high yield" investments, and then selling them to friend and foe alike, around the world-- knowing that they were loading their customers with junk. I heard an analyst on Bloomberg Radio say that Goldman Sachs was selling subprime mortgages as investments to clients while at the same time selling those same mortgages short in their own account.
What lies ahead? It is hard to make predictions, but I believe that investors will abandon the exotic and return to where their money belongs: in growing companies that can increase their profits and cash flow. Look for American stocks to out perform.
We are looking to own the good companies that were sold off in a panic for no good reason. Regional banks, real estate investment trusts, oil exploration, and healthcare. Restaurants are still busy, and people will go shopping again in the nice weather. And remember: in the stock market, the first year of the recovery is usually the most powerful. Make sure you don't miss it.
--Mark
|
"My goal is to manage your investments so that you have enough
money to lead the life that you want to lead. Your account with
my company is personalized blending different types of
investments in a way that is right for you. The growth and
safety of your account is our only focus!
-- Mark Meyerowitz |
|
|
