TAKE TWO

Albie's Take:

S&P500 has reached Daily Resistance/Retail value and chances are there will be some profit taking. These are my expectations but with all the good news on fri & weekend it might continue up to Weekly resistance.

News Events That I see as effecting the market:

Yahoo News: "The CBOE Volatility Index, or VIX, a measure of what investors are paying to protect themselves against the risk of losses, is at its lowest level in seven months."

IronFX: "Manufacturing in India and China improved in December, a sign the world’s fastest-growing major economies are withstanding Europe’s debt crisis."

MSN: Friday 20th "Cash-strapped Greece is fast running out of time as it pushes to wrap up an agreement by Monday paving the way for a fresh injection of aid before 14.5 billion euros ($18.5 billion) of bond repayments fall due in March."
TODAY: Yahoo.news: "Eurogroup chief: Eurozone wants interest rate on swapped Greek bonds 'well below 3.5 pct'"

Yahoo News: Thursday, January 19, 2012, 3:00 PM PST
"Rate on 30-year fixed mortgage falls to 3.88 percent, the 8th record low in the past year."

NOTE: Don't forget to look at Take Three on the last blog. Many of the takes are still valid!

Bryan's Take:

Since I take a long term approach to investing,the way I view these events are as something temporary and inconsequential. They are merely a snapshot as to state of things on a particular day. The way I invest is to consider whether individual businesses are worthy of being bought as an enterprise. If so, then I buy as many shares of that business as possible, provided I can get the shares at the right price taking into account it's probable future cash flow generation. Case in point: Today I bought shares of TNAV because the company boasts high returns on invested capital (a sign that management is adept at investing the company's excess capital at high returns)and is trading at an extremely reasonable valuation compared with it's future growth prospects. So the events and indicators Albie mentions, though they may useful tools for various types of Traders and Chart Enthusiasts, have about as much relevance to me as they would to your local convenience store owner. They are not going to have an affect on his business on a day to day basis, and are certainly not something he would pay the least bit of attention to...

Albie: Albie's Take:

Even though I agree that valuing a company and finding a great price to buy in on it is a great thing, I do not think that world economics plays only a part in the short term traders life. Big events happen very slowly. Identifying key things can help you get a grasp on what the turns the market will make for possibly six months to several years. And though I am presently in the process of valuing some new business to invest in, I also find that getting into a trade just to hold it at the same price or watch it fall for six months or more due to world events is perhaps a waste of my 'money's time'. As I found out a while back, Wall Street often will have a bad day not because anything bad is happening in the US. It often will take a spin out of control based on the EURO or something happening in China for instance. And if the Dow or S&P500 is having a bad day or month or year - it very well could mean my stock is too. If things are in process to influence long term trends for a bear or bull market, I for one want to know about it so that I at least have some clue as to how long I expect the market to continue this way. On the flip side, as Bryan stated in 'Take Three' (1-19-12) more negativity means a better discount price to get into a stock. And while this is plausible and desirable, it also helps to know what the S&P500's support line is so that you can get a feeling for the bottom price. If the odds that your stock will drop even lower along with the market, I would rather wait to buy.