Kicking Over Rocks
The Fourth of July is behind us, as is the first half of 2012. In the stock market, it has been quite a ride so far with high volatility and many news-driven gyrations delivering a return of about 5%. Today we see a battle shaping up between lower jobless claims, lower Chinese interest rates and more talk of European economic weakness. Each talking head on the tube has a different idea of what will happen in the second half of the year. I find that amusing since much of what happens depends on several unknowable factors, such as election results and what path Germany decides to take in Europe. Predicting the second half is like picking the World Series winner at the All-Star Break. I can give many plausible scenarios, but none are definite.
A far more productive use of my time is wandering around the corners of the financial markets kicking rocks and looking under bushes for cheap stocks. I do not feel like I can make an accurate prediction of where the market will close today or tomorrow but I can find companies that the market is overlooking or mispricing. Buying and holding these stocks until their value is recognized regardless of market movement has proven to be a profitable way to invest over the past few decades. I suspect it will be in the future as well....399 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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