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 In The Lonely Bull

Chinese currency devaluation shook up stock markets around the world. Many investors interpreted this as a sign that the Chinese economy is in far worse shape than feared. Along with other bits of data, fears of worldwide slowing were extrapolated. The result was that the current aversion to risk was reinforced and stock markets around the world tumbled.

However, the evidence for recession here and worldwide is quite thin. There is just as much evidence that Europe is working its way out of its malaise, the U.S. remains strong, may be getting stronger, and may help pull many other economies along. Investors seem to be excessively skittish; this happens, especially after several years of good performance. No one wants to lose their gains. We have taken some cautionary steps too, but believe that a rebound is likely. We are prepared to move either way, but evidence is mounting that a positive resolution is likely.

Now more than ever, stay steady, my friends.

the Lonely Bull

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