21.Jan.2013 Calm Before the Storm, or Problems Solved?
This could be a headline for the U.S. Stock Market, right?
Many in the finance community believe the worst is behind us and that the Federal Reserve's spending spree has literally papered over the problems. Others feel the worst is yet to come either when bond yields inevitably rise or severe inflation hits from said money printing. Note: ** there are the astute who realize severe 'hidden inflation' is already upon us in the decreased size and/or quality of goods, but that's an observation for a different blog.
In many ways this debate of whether the worst is behind us or the worst is yet to come reminds me of OSU football. Many fans believe 2010 and 2011 were aberrations. Others believe 2012 was the aberration, and last year was simply the eye of the storm.
So I ask you this: is the program "stable"? Why or why not?
Personally, I think things are stable for now. The problems of 2010 and 2011 were largely due to recruiting failures and player defects between 2006 and 2007 after Jim Gilstrap passed away. They also had to do with depth. Riley would not have the team going 100% in spring and fall practices because he could not afford injuries. When the season started, players weren't physically or mentally ready. These problems took too long to address (shocker), but they have been addressed with the addition of Gunderson and improved coaching/recruiters. Also in Riley's favor is that next year's schedule looks weak (Eastern Washington, Hawaii, Utah, San Diego State, Colorado, Washington State, Cal)…the Beavs could conceivably be 7-0 again. The schedule is back loaded with Stanford, USC, ASU, and Oregon, so is the trend now to start fast and then fade? This leads me to believe the program is stable, and the Pollyannas will have a good run.
With regard to the stock market, I can't say the same for the bulls. It appears to be a house of cards where primary dealers are the last and only buyers. I'd sell high despite the dollar dilution.