Which way next?

Another telling article in Forbes today. 

Naturally, it is a discussion of where the economy and the US stock market are headed next.  On one side, the pundits notice that “Cash for Clunkers” has stimulated economic demand and that most of the “real” stimulus money that was made available in the February bill is yet to be spent.  If CforC, modest as it was, made a difference, the $790B still to come, should provide even more suport for growth and therefore provide at least a floor for current US market prices.  On the other hand, it is argued that the strong corporate earnings we have seen and that have lead to the great market advance since March are the result of cost cutting, not demand (i.e, economic strength). 

So what’s “telling” is that once again, reasonable and informed people see vastly different outcomes.  One will be right.  One wrong.  Or perhaps, as Nassim Taleb might argue, they will both be wrong due to the regularly occurring but completely unpredictable scenarios that unfold in life.  Is your portfolio ready?

Forbes: “Now that cash for clunkers is finished, what will inspire consumer demand? The data is mixed, industry observers are divided and the growth to come is not clear.”  … (read the article)

http://www.forbes.com/2009/10/04/demand-growth-clunkers-intelligent-investing-stimulus.html?partner=alerts

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