Between the Lines
March 14th, 2007
By Vitaliy Katsenelson
I usually have CNBC muted in the background, but I was very amused by the interview given by the CEO of Countrywide (CFC). If you read between the lines of what he said he was pleading for the Fed to lower rates. He tried to say it subliminally in every way possible.
Another thought that comes to mind, over the last year or so investors forgot what losses in their portfolios looked like, as most of the buy decisions over last year led to gains. Investor risk tolerance doesn’t really change with market gyrations but the perception of tolerance does. This perception is being re-calibrated.
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2 Comments Add your own
1. M. Toscano | March 14th, 2007 at 11:04 am
I didn’t hear the interview, but agree that risk tolerance isn’t well calibrated at the moment.Many people lost thought about how we can lose money with stocks too!
Maybe is just beginning a process of re-equilibration, but it will require some pain…
But I fear more for markets (stocks) the 2nd part of 2007 rather than 1H07, because at the first drop, many investors will try to “buy the dip” and sustain market giving a bounce. But later in the year with consumer going down, earnings dropping (did you see that the contribution of GDP related to capex is falling? It happened in 2000…) there will be panic.
Ciao
2. Vitaliy | March 24th, 2007 at 2:20 am
I am not a great timer, but… it doesn’t feel like it is the end, more like the beginning.
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