Stock Market Gyrations:

The stock market indices all over the world had a precipitous drop this week. Thursday’s close was the bottom it hit in August after nearly 20% drop within a few days. For a month since then it has gyrated within a five hundred point range touching that bottom again at Thursday’s close. If the index closes on Friday a hundred points below Thursday’s mark, expect it to drop another five hundred points before forming a platform. Where it will go from there is any one’s guess.

What should an investor do in this environment? Honestly I don’t know. I won’t blame any one for folding his tent and going home. It depends on your ability to stand after taking some blows. That said, my hunch is that the things will not be as bad as in 2008. I think that most companies, even the financial institutions, are in a better place now than they were then. Companies in other business sectors are much better placed with much less debt and generally strong cash positions. Balance sheets are much stronger and even if some Euro national debts are downgraded and some banks fail, there is no danger of debt market seizing again.

I am staying put in the market expecting a revival in the prices of good companies sooner or later and continued payment of dividends in almost all of them. To enhance the prospects of capital gains my portfolio has a sprinkling of small companies which are takeover candidates. I have no assurance that the portfolio will keep its value in the short term nor the certainty that it won’t recover to some extent next week. The problem investors have is the unpredictability of the markets and that when they go up you have to be in the game to enjoy it. I do have complete faith that in the long term the stay put investors will be smiling. There is just too much money floating around to stay on the sidelines for long.

I am sorry I am not offering any firm advice. One final word: if you are losing sleep over it, sit down with your financial advisor and decide on a course of action that will get rid of the creeping insomnia.

Government Budgets:

Why does every Conservative leader emphasize cutting deficits by reducing essential services and public service employment? This is not the only way to balance the budgets. It can be done just as well by increasing taxes, marginally in many instances. This may reduce sale of some luxury items but will keep more people employed and will reduce the possibility of recession. Let us face it. poorer schools, less Medicare, crumbling transport infrastructure and lax regulation and law enforcement hurts business more than the general population.

As for debts, if the governments of countries most in debt taxed appropriately and the citizens paid the taxes they owed, the problem wouldn’t be there. For debt and budget problems in the U.S. and Europe blame the cowardice of the leaders of last two decades, not eliminate the jobs of people who have been working hard in difficult circumstances.

Response to the speech of the President of Iran at the U.N.:

United States has never done anything wrong and never will. Americans have always set an example and most people are happy to follow them. Anyone who says anything different should have his mouth sealed for good and be made to attend TEA party rallies for the rest of his life.

You won’t believe it!

Netanyahu informed a private meeting of his supporters in Washington that he turned down Harper’s request to join the Union of Israel because there is nothing in it for him and that he will present Obama’s application to the Knesset but only if the Security Council veto can be transferred to the Union and Chinese accept to convert the bonds they own at a reasonable discount of 50%.

Bad Joke of the Week

Oncologist: Studies practitioners who are often on call.