Who Benefits When the Stimulus Goes Away?
Steve McDonald was in a foul mood over lunch yesterday.
“Investors are getting too cocky,” he said.
“Well, we’ve been here before. We both know what greed looks like,” I replied.
“Perfectly understandable with the market up some 60% since March,” he replied.
“What troubles you the most?” I asked.
“The growing appetite for risk. According to Investor’s Intelligence the bull to bear ratio is approaching three to one. It was just two to one in early November. I suspect it will all end badly,” Steve said.
“So you’re not buying into the talk of a modest recovery,” I said knowing Steve’s answer.
“Nope. The government’s spending and incentives will peter out at some point. And we’ll be back to the same slow or no growth economy we’ve had most of this year.”
“What happens then?” I asked.
“Many companies will fall hard. But not all of them. Some companies will do just fine when the crap hits the fan,” Steve said. IDEClips
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