In our discussion this week with portfolio manager Roland Manarin of Manarin Investment Counsel, LTD.  He talked a little bit about the culture of fear that investors find themselves in these days, or as he calls it the “market bottom stew:

Mr. Manarin: There used to be an old recipe that I had called “market bottom stew” and it’s pretty much adding all of these negative ingredients that we’re deluged with by the media and when everybody is thoroughly disgusted, panicking and selling out of sheer fear - that’s usually the market bottom environment. I think we’re in the midst of brewing a wonderful batch of “market bottom stew” right now and all you have to do for ingredients is turn on CNBC or the other 24/7 news outfits in the morning, and you’re going to get a good bowl of “market bottom stew.”

However, despite this, Mr. Manarin urges investors not to give in to the current economic climate, and to look for signs of life in the economy:

Mr. Manarin: There are signs of life. The money supply has soared, money velocity is starting to increase and the yield curve is positive. Credit markets are thawing from last fall’s panic levels as shown in the three month LIBOR. Lower energy prices are a stimulus for consumers and the combination of lower price and lower mortgage rates seems to be putting a bottom in the housing market. Retail sales ex-autos have been positive for January and February. The Baltic Dry Index has more than doubled from its lows, the PPI and CPI have increased for two months, and the ISM manufacturing index and the ISM services index have increased from their lows. Stock valuations such as price to earnings and price to book are lower than they have been in years, and regulators are finally talking about bringing back the uptick rule and modifying mark-to-market accounting.

For the complete Investing Strategies report, including a full interview with Mr. Manarin, and a wide variety of other portfolio managers, click here. 

This entry was posted on Wednesday, April 15th, 2009 at 5:45 pm and is filed under General Investing. You can follow any responses to this entry through the RSS 2.0 feed.