Man vs Wild: When bears attack
Today's Financial News - Posted October 23, 2008
The stock market is about as volatile as it gets. The bears are making one charge after another. But as I learned firsthand, they are nothing to be scared of.
By Andrew Snyder
Baltimore – (TFN): For a conservative guy from a suburban neighborhood, I sure have had my share of exciting times.
Just like in those action-packed movies, I have had a blazing beam come crashing within inches of my face as the building burned around me. I have been stranded in Alaska’s remote wilds. And I have been close enough to smell the breath of a black bear as it hissed and clacked its jaws in a desperate attempt to make me flee in fear.
Out of all of my gray-hair creating events, the rumble with the 500-pound bear has got to rank as the best excuse to wet my pants.
I ain’t skeered
I was fishing a remote Alaskan river last August, in the height of the sockeye salmon run. As each fish surges and splashes through the raging current, the commotion acts like a dinner bell to the local bear population. The burly beasts come from miles away at the chance of an easy meal.
As long as you stay away from the hungry animals and their overly protected offspring, you will have no problems.
But accidentally wade between an intimidated bear and her newborn cubs and you are going to have a fight on your hands. It is a fight no scrawny guy from Baltimore is going to win.
In my case, the angry momma bear roared so close to me I could see the salmon blood caked on its front teeth. It was the first time out of countless ventures in the woods I wondered if I were going to make it home.
Fortunately, just like the vast majority of bear charges, it was a mere bluff. Once she realized I was there only to grab a few salmon for dinner and she had no reason to fear me, she pushed her way into the river and I trudged back to the lodge with damp pants and a bruised ego.
Obviously, this is not Field and Stream. It is a financial news site, so I am going somewhere with this story.
Just put yourself as an investor into my place as a fisherman. It is exactly the scene we have on Wall Street.
The bears are making one charge after another. It is all because of fear.
Fear that the economy is slowing.
Fear that a global depression is shaping up.
Fear that what we thought were appropriate valuations were way off base.
It looks like the bears are going to rip our necks apart. But like I learned in the Alaskan wilderness, bears have a nasty habit of not finishing what they started. They may scare the pants off of us now, but eventually the ferocious charge will be over.
The charge is almost over
Right now, Wall Street is desperate to price forward-looking earnings outlooks. Most third-quarter reports we are getting are as good or better than expected. It is the earnings forecasts that are throwing the markets into a frenzy.
The bears are taking every chance they can get to show us their teeth and power. But in just a few trading days, the bulk of the forecasts will have been made and Wall Street will have a firm grasp on where we are headed. As the talking heads like to say, we will have determined our “trading multiple.”
Bears are notoriously lazy animals. They look tough, mean, and occasionally make a bloody, savage kill. But most of the time, they lie around eating grass and jumping at their own shadow.
I am not scared of a bear market. You should feel the same way.
We have hit the bottom, a recession is priced, the credit markets are running smoothly and the bulls are back in charge.
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