Think back to some of the massive financial fiascos and blowups that turned the tide in the stock market: Penn Central declaring bankruptcy in 1970; the Fed stepping in to rescue the Continental Illinois Bank in 1984; Mexico’s peso debacle in 1994; and the Long Term Capital Management crisis in 1998.
This brings us to 2008 and the Bear Sterns (BSC) calamity. We were staring into the abyss, but the Fed stepped in and the market rebounded more than 400 points.
This is the stuff bottoms are made of!
We almost certainly have reached a bottom in the financials, but that is not to say there won’t be more blowups and down days ahead. For the most part, though, things can’t get much worse than they are right now.
Consumer confidence is extremely low and we’ve seen the steepest year-on-year drop in home prices since 1968. In fact, some people are buying houses again, because prices are coming back in line with reality.
So, investors should be thinking six to nine months down the road as they’re looking at what to buy now. One area you definitely want to get positioned in is alternative energy.
The 30% to 40% secular growth in alternative energy stocks will not be stopped by a recession or a bear market because:
1) Governments are beginning to mandate the use of cleaner and greener energy and technologies.
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