PALO ALTO, Calif. -
Here's a further example of how investors today are sailing through what for them is relatively uncharted territory: There is no conventional wisdom anymore. It's kind of like wandering around the desert without a compass.
Consider:
- Warren Buffett, in a saturation-bombing of his viewpoint throughout the media, says he is so soured on the stock market that he can't find any stocks he's "even mildly" interested in buying. And that includes the ones he already owns.
Buffett's been so right for so long that his opinion must give any investor pause. Note that Buffett isn't suggesting anyone should flee, just that they shouldn't double down right now.
(To be precise, as one reader implored me recently, Buffett isn't giving anyone advice. Rather he's merely informing us as to what he's doing. But we all know better: Wisdom delivered from on high is akin to advice.)
- A compelling interview in Sunday's New York Times with fund manager Steven Leuthold reveals a kindred spirit to Buffett's who's taking a somewhat different approach.
Like Buffett, Leuthold is buying junk bonds. But he also thinks valuations generally have come down far enough that they're at least fairly valued again. That means there are decent prices to be had, and so Leuthold is buying, especially technology stocks, which he thinks have been beaten up too much.
- BusinessWeek, in a piece marked by a curious certitude, writes in its current issue that "most pros" expect a healthy, if short-lived, relief rally should the war begin and then go well. The magazine even put a figure on its expected war dividend: 20 percent. I say this is curious because the notion of a war rally is predicated on such unsteady ground. No war is like the one before it. Suggesting to people that this one is predictable is a little foolhardy.
Now, having shown the diversity of opinion in the stock market, what's an investor to do? There very well may be a rally, though trying to time it is certainly a waste. This year or next the market might finally have that elusive up year we've all been waiting for.
| Recently by Adam Lashinsky
|
|
|
|
|
It's also possible all the "up" will happen in a short amount of time. Save being incredibly lucky, the only way to benefit is to be there. That means investing broadly now so you'll benefit. (My own strategy is to send regular payments each month to a diversified basket of stock mutual funds).
But it also means sheltering the assets you need in the shorter term somewhere nice and safe.
In a time of uncertainty the bold might make a killing -- or lose their shirts. The cautious sleep well but might miss out. And those who pursue a combination quite possibly will do the best of all.
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.
Sign up to receive The Bottom Line by e-mail.
|
