The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Enjoy the Ride . . . Again

11/07/2010

After a highly eventful week, the stock market is at a two-year high, about the same level as we were when Lehman was allowed to collapse. Nonetheless, that is some three thousand points on the Dow — below our all-time high in 2007. The market is still down 21% from those heady days.

Think back to last Spring when the market was moving up daily. The pundits were almost univerally bullish. But, I said then the market had disconnected from the economy and needed to wait until the economy caught up, which I expected would be in the fourth quarter.

The economy is starting to show life again, and as usual, the market is getting ahead of it. Winter is traditionally a good time to be fully invested. By Spring, we will be due for 10-20% correction.

So, enjoy the ride . . . for now!

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