The Marcroeconomic Environment – for the beginning investor
Posted on | August 15, 2009 | No Comments
This will be a brief post demonstrating the challenges facing small time investors as they attempt to assemble meaningful information about the macroeconomic environment. I have stated previously that as an investor you should have a knowledge of the world and national economics, to inform your investment decisions. This is a contrarian position to take in much of the value investing community. I will not argue with the philosophy that buying a good deal can be independent of macroeconomics, but I think it is harder.
But I digress. I was listing to my favorite series of podcasts on economics Bloomberg on the economy and Bloomberg surveillance. For the cheapsake at heart, these are, of course, free sources of information freely downloadable from iTunes. I have become a little behind and as I listened to a few podcasts, I was reminded how different the experts are in there predictions for the broader world. Here are a few.
Chris Rupkey, chief economist at Bank of Tokyo-Mitsubishi said that he believes the recession ended in April or May.
Joshua Shapiro, chief U.S. economist at MFR Inc we will not be out of the woods until we have an improvement in the job market.
Robert Prechter, founder of Elliott Wave International Inc. Stocks are overvalued right now. Good time to be in case until the next buying opportunity.
Bruce Kasman, chief economist at JPMorgan Chase & Co. ,says there is an economic bounce right now.
Douglas Cliggott, chief investment officer at Dover Management there is downward pressure on corporate profits.
Study and and listen and then decide for yourself. My belief is that the stock market in general is getting ahead of itself. Even the proponents of the “recession is over” movement, admit that the unemployment situation is unlikely to get a whole lot better in the near term.
The consumer in the United States is responsible for 2/3 of the economy. If 1 in 10 of us is out of work that will effect that consumer number pretty seriously. It is at best a time to be cautious. That is why I am still looking at Net net stocks over other “opportunities.”
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