Monday, March 21, 2011

Buy on weakness

Maybe the weekend was too long. Long enough for the Japanese to think of a plan to contain the nuclear reactor. Hence, the stock market staged a strong rally even though the Japanese market is closed for a bank holiday. But for some strange reason, the bombing of Libya seems like the stronger reason for the surge in the stock market. I mean, Libya does not even have weapons of mass destruction and going there to scare Qaddafi (that was not their stated intention, but rather a no-fly zone) could give the  America and its European allies reasons to spend on weapons. And at least for Libya, there is no need for ground troops, so another messy Iraq and Afghanistan scenario looks unlikely. So I will say that it is time to buy into weakness as any nuclear explosion has been fully discounted. Unless of course, you are thinking there is another Black Swan appearing.

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