From a small northwestern observatory…

Finance and economics generally focused on real estate

A few thoughts about the stock market

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As the Dow Jones Industrial Average creeps ever so slowly toward 13,000, I’m reminded of the words of William Shakespeare, from the famed “Seven Ages of Man” soliloquy in the comedy, As You Like It:

…and then the whining school-boy, with his satchel and shining morning face, creeping like snail, unwillingly to school…

Now of course this blog is primarily focused on real estate and the various economic forces that affect it.  However, since so much of real estate is securitized, particularly in the U.S., and so many of the players in the real estate market are publicly traded companies, an occasional glance at the ticker-tape is in order.

With that in mind, I have a small idea.  It’s not a huge one, but just a little observation, if you will, about why the market is creeping so slowly, even though so many pundits claim that it’s underpriced right now.  (I neither agree nor disagree with that sentiment — I’m in a wait and see mode.)

However….. I serve on the board of a small Trust which is VERY conservative.  Our sole manager also manages a lot of high-tech money (remember — Microsoft is headquartered here… duh…).  We have a lot of liquidity, and even our bond investments have a very short average duration.

As one money manager put it to me, “Our clients aren’t interested in MAKING money in the stock market.  They just don’t want to LOSE any more money in the stock market.”

Thus, there MAY BE some upside potential to this market.  However, it may take a long time to realize it, because so many money managers got singed in the flames of the market burn-out a few years ago.

Written by johnkilpatrick

February 21, 2012 at 9:32 am

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