Market comments and reconsidering a position.

The past couple of days continue to show an unhealthy market, but that is to be expected with an unhealthy economy.  The up ticks the past two days are nothing more than bargain hunting and the lack of high volume trading. Today futures note a down market, but again not much and that actually is good as those who bought in the last two days are likely taking some profits.  I am concerned about the Friday expectations of the Bernanke speech. Expectations are too high for a QE3 to begin and I can not see the chairman doing anything right now shortly after saying rates will remain near zero for the next two years. Investor and traders are hoping for more money candy and I believe that would not be a positive in my opinion.  The good news is that the market has settled down some in the past few trading days.

 

If you are looking for market stability going forward you are going to be disappointed. There are too many uncertainties out there to make that a reality.  The political situation with the upcoming 2012 budget, renewing of the CR, the super committees, the Obama Sept. speech, the 2012 election, and etc. make for a volitle market for at least another 15 months. Again selective picking of stocks is the way to go. If you are a long term investor stay put in your positions and continue to add when opportunity presents itself.  Until we hopefully settle the long term political landscape next year you will not get clarity on investing.

 

BP has been on my radar for some time now and I have alternately liked the opportunity and disliked the opportunity. BP is still a large oil and gas company with wide ranging assets and a nice dividend. At the same time they face significant issues with lawsuits and the ongoing lack of activity in the Gulf of Mexico due to Obama's moratorium on drilling. However there is serious upside in the fact the $20 billion dollar fund they set aside for Gulf pay outs will see about $10 billion or more returned to the company after August 2013 since only $6 billion has been paid out to date. A PE of only 6 and the price down around $10 from the 52 week high make for enticing profit possibilities. Again, I am considering taking an option position in this security sometime soon.