The stock markets around the world are selling off substantially in the wake of further concerns out of Europe that the financial system is more unstable than was previously thought. It also appears that the Greek bankruptcy bailout that was agreed upon last week may not even go through b/c the Greek Parliament is unhappy about the terms of it. And, as I mentioned yesterday, the financial firm MF Global filed for bankruptcy, and today it appears that some of the clients money has gone missing; this of course is reminiscent of past ponzi schemes, corporate fraud and corruption. All three of these hurts investor confidence and therefore causes market participants to sell their stocks and flee the markets.
As of now, the U.S. markets are down by over 2.5% and gold, which is known as a "safe haven" investment, is also down by over 1%. There's really no place to hide today other than cash. Even in light of the ugly selloff today, I am not yet buying any stock on this dip. The financials are getting crushed, on average down by 5%, so I am definately looking to add to Etrade, Citigroup, Suntrust, KKR Financial, and maybe even buy back some of the Sallie Mae stock I sold. I'm also eyeing Alcoa (AA), Verizon (VZ), and Chimera Investment Corp (CIM) b/c the stock is now paying a dividend in excess of 18%.
On a somewhat brighter note, Credit Suisse ugraded Citigroup (C) this morning with a price target of $48/share over the next 6 months.
What an ugly first day to start the month of November...
