Thursday, May 25, 2006

Getting ready for a road trip, and other blathering

I won't be posting much (if at all) for the next week; I'll be driving to the east coast to live/work for the summer, which should be fun & interesting. Stay tuned....

Until then I wanted to post a bit of economic jibby-jabba. First some background on me so you know not to take my advice too seriously :)

I began investing in a very simple fashion, mostly through ESPP and retirement plans, utilizing prepackaged plans based on my risk comfort and retirement goals. As I've started to learn more about investing, the first items I've focused on are indicators of when to pull out, having seen how badly others were hurt by the tech bubble. I'm trying to make the case for taking a step back from the market now since I feel that we've reached a point where the market's forward progress is sustained on hope and not real fundamentals. Since I am not a speculator, I've chosen to pull back from the conflagration. But now I'm not entirely sure where to reinvest, so I've got a lot more studying to do.
Okay, now back to the reinforcement of my beliefs that things are slowing down. First, some analysis (pdf) on how the supposed positive growth indicator for housing this month was a sandbagged figure (pdf) and is misleading. There's also some interesting analysis on US and worldwide inflation. (Thanks go to Calculated Risk for the link).

Next, some analysis from Calculated Risk that takes a very focused look at the housing market. Interesting charts show mortgage application volume and existing housing inventory.

Finally a post from Angry Bear to add some more recession paranoia to the mix. I'm not willing to be a Chicken Little, and much of my money is still in the markets for the long term.... but I am preparing for H2 2006 / H1 2007 as a tremendous buying opportunity.

Good luck!

[Update:] From another great post on Calculated Risk I've observed again that the announced economic indicators are often sandbagged or cherry picked to spin the best outlook. This time it's the unemployment figures for seasonally adjusted "initial claims" of lost jobs. The announcement was that 40K fewer claims were made than the previous week, a seemingly good indicator. Read more for the full picture of why things aren't so rosy in the job market either. (Sorry to be such a downer, I just don't want to see people burned by a downturn they could have seen coming).

1 comment:

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