Tuesday, September 06, 2005

Lehman Brothers Are Wimps

Market frailty blamed on Kartrina forced Lehman Bros to cut back their equity weighting on Tuesday.


Rebuilding will be a major positive; risks are overhyped.

We like domestic infrastructure companies, like Caterpillar, who we gave a Buy Rating last week.

The US stock market is a resilient beast.

Important lows in stock prices are often accompanied by specific, cataclysmic events in the economy or in world affairs.

These events serve to "crystallize bearish sentiment," as Carl Futia so aptly put it.

Ultimately, these events are good for the market -- they shake out the weak and frail.

The media talks about reduced GDP growth, high and rising gasoline prices, and so on.

Is the market dropping?

The answer is a resounding no.

Katrina will create jobs and awaken the dormant investor who forgot stocks are the best asset class in which to invest.

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