Time and (lower stock) prices cure all, so even before credit improves, hedge fund redemptions decelerate, and signs emerge that the current forceful policy measures are remedying the downside economic spiral and an engaged President-elect surrounded by an experienced and intellectually gifted corps of advisers enacts his own policies, the market's downside influences could recede as stock prices might advance well before the all-clear economic signal is embraced.
Given the above, my investment blueprint over the next several months is taking a more positive tint. We seem to be moving toward the following paradox:
1. Investments that are deemed to be safe (e.g., 10-year notes, 30-year bonds) are increasingly unsafe, and I am shorting.
2. Investments that are deemed to be risky (e.g., selected equities) are becoming safer, and I am buying them (gingerly, for now).
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