Saturday, January 31, 2009

Will the 'January Effect' ring true

Uh, oh . . . one of the oldest Wall Street adages is the “January Effect,” which states that … so goes January, so goes the year. The bad news is that the Dow lost 8.4% this month, the worst January in history, indicating a terrible 2009. A little piece of good news is that the “January Effect” is not ALWAYS correct.

More bad news was Friday’s report that the GDP decreased 3.8% in the fourth quarter, the worst since 1982. More good news is that we were expecting a decrease of 5.5%.

Oh, yeah . . . then there is Warren Buffett’s ageless and priceless advice to … be fearful when others are greedy and be greedy when others are fearful.