Sunday, August 1, 2010

Continuing the uncertain journey

After three weeks of quarterly financial reports from S&P 500 companies, three hundred and nine firms collectively reported an 11% annual revenue growth rate. Additionally, on Friday, the U.S. Department of Commerce announced that second quarter GDP grew at a slightly lower than expected annual rate of 2.4%.

MY TAKE: As economic cross currents and confusion persist, equity markets swing wildly intraday as moves are dominated by 1) systematic and high frequency trading systems, 2) leveraged exchange traded fund (ETF) speculators and 3) portfolio managers playing the "trading range" game. Within this context, please consider the following thought from Warren Buffett: "Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."

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