Thursday, October 16, 2008

Crisis Or Opportunity of A Lifetime?

With all the negative news on the economy, the stock market crash and the chaotic actions of our national leaders, one has to wonder when or if this "crisis" will ever end. I may be viewed as the perennial bull for saying this, but what I see right now is the opportunity of a lifetime! Stock prices have plunged, everybody is bailing out and parking their money in low interest cash accounts. I think now is the time to make the real money in the stock market. We may or may not be at the bottom of the market cycle, but I haven't seen such bargains in the stock market in years!

My personal stock account has suffered along with everyone else's, however, instead of panic selling, I've been on a personal buying spree. My biggest fear at this point is that the "crisis" will end before I'm able to accumulate all of the shares I'd like to own. You might think I'm crazy for taking this point of view, but just look at what is really going on. Warren Buffett, undeniably one of the most brilliant investors of all time, is investing billions of dollars. Is he trying to prop up the U.S. stock market single handed? I doubt it. I think he recognises the situation as an opportunity for building his tremendous wealth even further. Gas and oil prices are plummeting, leaving more discretionary income in the hands of consumers. What do consumers usually do when they have more discretionary income? They spend it on goods and services. When they spend, business begin to grow earnings, which in turn leads to more jobs and a healthier economy. This may sound a little simplistic, but that is the way a market economy operates. How soon will all these things come about? Your guess is as good as mine, but I don't think it will take as long as all the experts seem to think.

I'm not a believer in bailouts, I think they are mostly a political ploy and will only lead to job destroying higher taxes. But I am a firm believer in the power of the free market economy to overcome tremendous adversity. I can't help but think that a few years down the road a lot of people are going to be saying, "We had nothing to fear but fear itself."

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