Wednesday, February 25, 2009

All American Investor: Stress Test Good, Could lead to a Bottom in the Stock Market

This is one of the better articles I have read on the stress test--Stress Test for Banks Exposes Rift on Wall St. It has me thinking about the long term direction of the stock market.

I think if you read this article carefully you might conclude that much of what is being written about banks is getting discounted in the stock market. I am not saying everything is beautiful. Quite the contrary, we are teetering on the brink of disaster. But, I find myself asking myself constantly--has the market discounted the news. It is always hard when things look bleak to see the light at the end of the tunnel. However, the market always discounts the future long before the future gets here. The market always bottoms when things look bleakest to the herd. The herd tends to focus on the recent past, rarely looking forward into the future."

Test of Banks Could lead to a Bottom in the Stock Market

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