reports 20th feb, page-66

Mike,

I am not optimistic on global economy either. I think the banking problems of 2008/2009 in North America have just been postponed. The Fed bailout stabilised the banks and massive wall of money printing has lead to nominal increases in GDP globally. However humans have an infinite capacity to repeat the same mistakes again and again. Rates going up in the US will show which banks have been swimming naked in high tide.

However economy <> fundamentals <> the stock market. Example. NAB on Friday reported essentially the same profit it has been reporting for the past 2 years. Yet share price is North of $34 compared to mid 20s in years past.

Stock prices = sentiment, and low interest rates, explains why investors are paying 30% more for the same asset than 2 years ago. My trading/investing is so much better after making that mental adjustment, though I still do let emotion get the better of me at times.