No Country for Young or Old Men
...Russell Comment -- The Fed is going all out in its effort to get the banks to start lending again. This includes taking in almost anything for collateral including those junky mortgage-backed bonds.
The new recognition -- we're not dealing with a liquidity problem, we're dealing with a solvency problem!
...The Stock Market -- where are we -- and what are we looking for? We're in a bear market, we don't know how long it will last, and we're looking for any indication that we might be near a bottom.
...There are actually two types of market bottoms. One is a temporarily oversold bottom, at which time stocks will not be priced at great values -- examples are the lows of 1957, 1962 or even 2002. The other type of bottom occurs when stocks are selling at great values as they were in 1942, 1949, 1974, 1980. These are the historic bottoms that occur once or maybe twice in a generation. What I'm watching for now is a temporary bottom that could possibly appear in the days or weeks or even months ahead.
...Question -- Russell, talk is talk, but what have you personally done with your own investments?
Answer -- I took my own advice. I've held large positions in gold, smaller positions in SLV and GDX, and the rest (about 60%) in T-bills. Not much income in this mix, but who needs it with the precious metals acting the way they have.
...Question -- Russell,
I note that many top analysts are posting lists of good stocks
that may be held during a bear market. A few analysts are saying
that one should hold "value stocks" rather than "growth
stocks" in a bear market. What do you think?
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