Sunday, June 21, 2009

A Tale of Two Indices

I present these two charts for your consideration. Can you guess why?




The first chart is the US Home Construction Index to which much is attributed when the constituents thereof begin to show some life (read green shoots).  The second chart is the Fixed Line Telecommunications Index….  I would suggest that we could see some multi-year languishing in the former based on the latter.


guitars said...

I think your thesis is correct that the inflation/deflation outcome will be pivotal. I have read so many things supporting both sides that I have become basically paralyzed as regarding investing. I remain 95% cash about half in dollars, half in euros. If I had to bet I would be on deflation for the next few years. I did buy gold at $425 and will keep it as a hedge. I hate getting so little for cash but, it beats losing it. Thanks for your thoughts and insights.

Leisa said...

I'd like to recommend to you, guitars, Justin Mamis' book, The Nature of Risk. Reading that book recently gave me a better understanding of risk--and more importantly, how to manage it better. I have to say that since reading it, my results have improved. (I've also been more patient in my positions selected--truly waiting for what I considered low-risk set ups.)

Your gold buy was at a timely price.

Thanks for reading and taking time to comment.