The markets continue to be hammered and there is a distinct odor of fear hanging over the markets. We are trying to back bounce this afternoon as investors rush to buy tech as it looked “cheap” to them. I have no idea how you get "cheap" out of these valuations, but traders will trade even if it doesn’t make sense. The fact that the price is down does not mean an issue is cheap, but that is a lesson a lot of folks need to learn for themselves.
I wrote the other day that if you are a long-term value investor still in the accumulation phase of your life, lower prices are more of a cause for champagne rather than concern. I was reading the Carlyle Group (NASDAQ:CG) call transcript today, and David Rubenstein expressed the right mindset for this market. He told his investors that “We expect a tougher environment over the next few years, but it is in this environment that we expect to see the best opportunities. For the past two years, we have highlighted the challenge of high asset values and the impact that that has had on our investment phase. We think today and in the near future from a new deal standpoint valuations will be more to our liking.” Continue Reading »