Of course as I suggested last week, nothing much came out of the financial summit that member countries of the European Union had this past weekend. It appears that Germany and France are still at odds on who is going to "carry the most burden" in stabilizing the financial system. On another negative note, S&P (which is a credit agency that monitors companies and countries - similar to a credit agency that monitors peoples credit) came out and said that they were considering lowering their credit ratings on German and France due in part to the amount of debt the two countries have AND how the financial calamity is affecting their economies.
While the markets are down by about 2% today, with the financials of course being the biggest losers, I think stocks are starting to look attractive. The important thing to remember is that when stocks sell off and go down in price, they become more attractive because there is better value in the price. Think about it this way, if you wanted to buy a house and the seller wanted $200,000 for it and you decided not to buy it because it was too expensive. Now if the seller decided he would sell you the same house that you want for $150,000, wouldnt the new price of the house be more attractive? Absolutely.
In talking with other money managers over email, some of the smartest ones that I know believe that in general stocks are somewhere around 10% undervalued. I haven't bought any stock today, but I'm watching the price levels and I might start to pick up some shares later.
