Very early in the year 2009 we formulated four points that we felt needed to happen in order to give the markets a better tone. While not entirely all encompassing, we attempted to hit a few major building blocks for the Capital Markets and the possibility of a more positive movement. Today we get to put a check mark by a third bullet. While out of order, this being our number four point, we are 75% of the way there and looking better day by day. Here is today’s review and summary for bullet four:
4. Investor sentiment needs to become more positive. In Q 4 2008 investor sentiment fell to all time lows, we need this to trend more positive.
After a Korean Nuclear test blast, GM Bankruptcy filing, higher unemployment rates, and a digestion of increased interest rates, market participants have been shrugged off the negative and embraced the positives. This leads to an obvious check mark to our investor sentiment bullet turning positive, leaving only one more item to go. See Number 3 below.
As a quick review, here are the four points and related comments/links:
1. Very short term treasury rates need to rise. Currently the 1,3, and 6 month treasuries are yielding almost zero, we need to see those rates rise. http://street-cents.com/2009/02/02/2009-key-market-items-to-watch-update-from-jan-6-2009/
2. Company buy outs need to commence. Valuations are low, brave/smart companies need to step up to the plate and begin buying out smaller companies at great prices.http://street-cents.com/2009/03/18/2009-key-market-items-to-watch-update/
3. Residential housing prices need to stabilize. Home prices continue to fall, although at a slower pace, but we need stabilization. A second way to review this is to watch inventory. We are currently at almost one year’s inventory, we need this to fall substantially. http://street-cents.com/2009/02/13/update-on-2009-key-items-to-watch-comments-by-geithner-yesterday-addressed-our-item-number-3/
4. Investor sentiment needs to become more positive. In Q 4 2008 investor sentiment fell to all time lows, we need this to trend more positive.
Stay patient ! JK