Here’s some reason among the panic:
If you were to ask me last year what it would take to become more constructive in this sector, however, I would have pointed to four primary points.
The first is time and price, both of which have come to pass. The second is analyst recommendations, which have flipped from table-pounding buys to a litany of “sells” and “holds.” The third is sentiment, which is now the mirror image of where we were. Finally, I would have said that a high profile bankruptcy would be needed and Bear Stearns qualifies as such.
It’s important to remember that the Depression was an era rather than an event. During that period, equities enjoyed rallies that littered hope amongst the despair. I believe we’re in for a similarly sullen stretch, one that lasts a lot longer than most people think. But that doesn’t mean we can’t rally along the way.
