Smart Money
What is smart money? Smart money is the money guided by people we assume are smarter than us, institutions. But, it's more than just that, taken to another level, smart money is assumed to be that capital guided by successful institutional investors, the guys traders call "smart money." These traders receive orders from successful or perceived successful money managers, and the rumors of where the smart money is moving are born.
At times like these, with the market in turmoil, everybody wants to know where the smart money is. There are two ways to look at the current investment environment. While we here at The Greek are expecting recession, and calling for weakening consumer spending and consolidation within consumer sensitive industries including retail, restaurant and even spillover into commercial construction, at the same time, stimulants are arriving that should eventually turn the situation around.
When I go out on a limb and make a recommendation to buy stocks like I did yesterday, I must admit to some trepidation. My natural instincts tell me sell, run and hide. Human psychology probably explains this, and likely explains why the market is now reacting to pending recession, when people like me were warning of it since early last year. So, I have to ask myself, "am I too early?" Myself replies, "I don't know, but I'm terrified." I'm also cracking myself up at the moment...
So, over the next few months the data will likely deteriorate, and this should cause fluctuation in stock prices. However, I believe the trend for stocks this year should be one of upward direction. In this dynamic market, we cannot ignore the changes that occur. While we are still concerned about consumer-spending softness, as indicated in today's personal consumption data, we also cannot overlook the significant actions of the federal government and the Federal Reserve to mitigate this deterioration. So, that’s why I follow my conviction and say start buying stocks now, while closing my eyes and saying a prayer as well. History tells me, as well as my knowledge that is uninfluenced by emotion, that the market should turn before the economy. However, since the market is dynamic, we must constantly monitor changes in factors and the entry of new factors that could change the outlook for stocks.
Market-Moving News
- Bloomberg: Weekly Initial Unemployment Claims Rocket Higher
- BEA: Personal Income, Consumption Release
- AP/Yahoo!: Consumer Spending Dropped in December
- MarketWatch: Q4 Employment Cost Index Rises at Expected Pace
- Monster Employment Index Declines in January
- NAPM Chicago PMI Disappoints at 51.5 Vs. 52.0 Expected
- MarketWatch: Volatility Grips Asian Trading
- FT: Europe Sinks on Bond Insurance Concern
- AP/Yahoo!: MBIA (NYSE: MBI) Losses $2.3 Bln. on Writedowns
- CNBC Video: Ross Says Mortgage Insurer Acquisition Must Precede Downgrade
- CNN Money: Fiscal Stimulus Faces Senate Vote
- CNBC: Oil Falls Below $91 on Economic Concern
- EIA Natural Gas Report Shows Greatest Inventory Draw in History
- ECONOMIC REPORT 3:00 - Farm Prices
- Forbes: Super Investor Picks up Bargains
- CNBC: European Inflation Hits High
- Yahoo! Earnings Calendar
- CNBC: MasterCard (NYSE: MA) Blows Numbers Away
- Bloomberg: Proctor & Gamble (NYSE: PG) Profit Rises, Folgers Spinoff in Works
- AP/Yahoo!: CVS (NYSE: CVS) Profit Nearly Doubles
- CNN Money: Bristol-Myers Squibb (NYSE: BMY) Misses Estimates
- AP/Yahoo!: Mattel (NYSE: MAT) Posts Higher Profit
- Platts: ArcelorMittal to Acquire 3 Russian Coal Mines
- AP/Yahoo!: Sony (NYSE: SNE) Profit Up 25%
- AP/Yahoo!: Amazon.com (Nasdaq: AMZN) Profit Margins Squeezed
- AP/Yahoo!: Burger King (NYSE: BKC) Gets Whopper of Boost
- AP/Yahoo!: L3 (NYSE: LLL) Profits, Raises Outlook
- Greek's Week Ahead: Nascent Rally Sees Speed Bump
- Economist: Geopolitical Week Ahead
- Iran Daily: Tales from the Dark Side
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