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Potter isn’t selling. Potter’s buying!

Don’t you see what’s happening? Potter isn’t selling. Potter’s buying! And why? Because we’re panicky and he’s not.

—Jimmy Stewart as George Bailey, It’s a Wonderful Life

Word has it that there were a couple of hedge funds that were liquidating all their assets last week, driving down prices. Everytime the market tried to rally, sell orders for billions of dollars of assets would hit the market, driving prices down further. Add to that all of the selling by margin clerks covering loaned positions, and we had some very panicky sellers.

Forced selling is another sign of a bottom being put in. I know its hard to hang on in the face of this action, but we are due for a big rally.

In coming days, I'll be publishing an updated investment strategy that will be our guide to portfolio management during the global recession that we will need to endure. The worldwide credit crisis will impact markets for months to come, and we need to have a plan to ride portfolio values back up from their artificially depressed levels.

Mark