An Insight Too Late
No, this is not an entry about an insight into music or craft. This is another insight into the volatility of the financial markets. As I said in a previous entry, I expected the fund managers to pump up stock prices tomorrow afternoon, creating a short lived selling opportunity at about 3:45 pm. 4pm tomorrow is the end of the first quarter of 2007 and the fund managers have a stake in making their funds’ performances look artificially strong; and then selling like crazy on Monday, bringing the stock prices back down to a reasonable and rational level. This Iranian hostage crises has turned the whole thing around. Oil prices have risen to about 66 dollars a barrel in the fear of a supply disruption in the Strait of Hormuz. Two nights ago, oil prices shot up to 70 dollars a barrel for a few short minutes over the rumor of an Iranian ship shooting over the bow of an American ship in the gulf. These higher oil prices decrease the net profit of most corporations as well as the net income of all consumers. My current prediction is that investors will get out of the market by 3:45 pm tomorrow (Friday) and that I should have gotten out today. Investors will not want to wake up Monday morning to find that war has broken out between Iran and another country and that oil prices have gone up to 80 dollars a barrel and that the stock market will immediately crash. Why didn’t I realize this today before 4pm ? I sold one of my Nasdaq stocks after hours for a small profit of less than 1%. A couple of other recently acquirred laggards will have to wait until tomorrow morning because they are traded on the AMEX during normal trading hours only. I will try to sell them at a minimal profit or loss by 9:45 am. Now if this Iranian crises settles down before 4pm tomorrow, the market could rally before the close tomorrow, but the odds are more in favor of a stalemate or worse in my opinion. Perhaps if I succeed at this attempt at damage control I can then direct my energies to the suffering family members of these British military members who have been “questioned” by Iranian authorities. From reading my diary you might never know that activities such as music and eldercare are a big part of my life, but the financial decisions that I make over the next six weeks will determine my income for the rest of the year and these decisions have to be made with precise, educated exactitude ! It also wouldn’t hurt to do this work in a relaxed, attentive state until the work reaches a state of completion. I do wish for the safe return of the British military personel and for the peace of mind of their families and the entire British people.
Carefully,
I.C.