RE:Most are expecting markets to take a dive...Wynjoe wrote: I'm on the opposite end of the spectrum. Dow to 50000 plus,in short order.wages are sky high with no end in site,thus cash is becoming worthless. Some companies appear to have a high valuation, however to start a competing company in many venues would see astronomical costs associated with building in todays inflationary world. Case in point ,Suncor, oil prices will continue to rise, now if Suncor had to rebuild its infrastructure in todays dollars (as future competitors must),the costs to clear land,acquire permits, buy and construct processing facilities ,and on and on,would and will be off the charts,so while Suncors assets may seem fairly valued in yesterdays dollars,tomorrow's dollars is a different can of worms. Now I use Suncor as an example but many in other commodities are of the same cloth ,mining, shipbuilding, airlines and the list goes on.Many will be caught in surprise of future investment outcomes, your thoughts?
Hope your right about about Dow prediction. I can agree with you on the infrastructure aspect and don't see any new companies starting up a mining business or as such where it would cost an arm and a leg to get their feet on the ground.
What I do see if high inflation as a result of too much money chasing to few products. This is not just oil related, there is a huge supply shortage of everything and it's going to get worse.
Hence I can now see the Fed trying to slow down the economy by removing some of that liquidity and raising rates faster. They cannot fix the supply problem so they go after the demand.
Will it work? Don't know.
Will we go into a recession? Don't know.
Some people think they will go hard then back off so they can restart the lowering cycle again.
I can't predict what will happen but if they go dow this path it might be feasible to think that certain stocks will get hit harder than others such as some of the tech sector. Real estate will lose value. Will Growth stocks need not growth anymore?
Will oil stocks come down if the rest of the market is dropping?
Fed is really trying to thread a needle with the economy and all I can say is good luck.
I am still holding lots of oil stocks and it would be nice to hold them for awhile longer like at least 2 or more quarters but I guess that will depend on what the people in power do.
IMO.....