The markets are up slightly today, which is especially surprising that Germany's credit rating was downgraded today by one of the many stupid credit companies out there. An extremely positive release this morning was the Home Builders Sentiment index which showed the highest positive numbers in 4 1/2 years. Basically this is an index which takes a look at home builders across the country and sees how positive (or negative) they are about the housing markets.
In an interesting turn of events, the co-founder of Yahoo Jerry Yang, abruptly resigned from the company yesterday. Yang was the Chief Managing Officer of the company and was also a board member. As a personal shareholder (for myself and my clients), I view this news as excellent in that I believe it clears the way for Yahoo to make some sort of transaction, which I believe will ultimately be that they sell the company. The reason I view this as such good news is that Yang was one of the main reasons why Yahoo has not been acquired. He's always been of the opinion that he wanted to remain in control of the company, and he was the main reason why Yahoo turned down the 44 billion offer from Microsoft for $26/share several years back. Now that Yang is out of the way, I believe Yahoo will do something to unlock shareholder value and reward its investors. I think the stock will trade towards $20/share over the next month and could be acquired by another company or investor for somewhere are $22-$24/share.
Despite the fact that the markets are up so far today, I think the most prudent course of action right now is to sit on ones hands and be patient. I would not rush into the markets and start aggressively buying stocks or mutual funds as I expect the markets to remain in a tight trading range for the next couple of weeks.
