I thought that I would do a reverse reblog and bring in a post from the outside world. Most of you know my business partner, Rich Dansereau. What some of you do not know is that he has an outside blog through Blogger called "Rich talks Real Estate". After reading this blog, I had to reblog it here for everyone to read.
If you would like to comment on it, please do so on his blog. I have blocked the comment feature here.
According to a report today by Forbes.com, the proverbial bottom of the economic market has already happened. Did you feel the bounce? Since hitting a ten year low on November 20, 2008, the S & P 500 has been rebounding with steady gains. With 93% of stocks that trade on the NYSE having hit yearly lows on October 10, 2008 several prominent investors believe that day was the actual bottom of the market. Further evidence of a bottom having been not only reached but left behind several months ago is the 13.6% increase in value of "B" shares of Warren Buffet's company, Berkshire Hathaway, and a renewed excitement and interest in investing in American stocks. I could go on citing statistics gleaned from the Forbes story but the real question is, what does this all mean?
Most importantly to the American public is that this means the worm has turned and so too has the economy. Preposterous you say! How can the economic markets have turned with "December's 524,000 layoffs bring 2008 job losses to 2.6 million and the national unemployment rate to 7.2% (Source: Forbes.com, U.S. Jobs Hemorrhage in '08)" The way that these two seemingly different indicators can be reconciled is that once the markets have begun their recovery, if history can still be used as a guide, the markets' bottom is reached six months before the actual end of the recession. The time frame for the end of the recession may actually be much shorter in the age of the internet. The flow of information and faster decision making processes may mean the six month time frame could be much shorter. Though you may not have felt the thud when the market hit the floor, these indicators are good signs that we will all be feeling bounce as the recession ends.