Friday looked interesting to me. GS C MER, were fighting the trend people were stepin in and buying these over tech. By the end of 2007 we maybe surprised of this outcome. Remember these Financial company's should be able to come clean and and wright this nonsense off a few quarts down the road. I think judging by one days performance it is to soon to say a rotation out of tech into Financial however they do have limited dowside compared to tech. IE. bidu appl rimm goog etc
Financials will definitely be the next position/sector play, but it's still a bit too early for full blown positions. You might be able to eaaaassseeee into a position now, but financials usually start to perform when the market as a whole has bottomed. What this means is that the carnage needs to happen to the tech stocks before the financials are fully attractive. Too early to speculate about a financial bottom. There's bound to be a lot of bad news about financials that is currently being held. Watch them closely and scoop up a few when the bad news comes out, but expect downside on those positions too.
Here's a lesson for you. The financials are a leading indicator of the shape that the economy is in. If the financials bite it as they've been doing, lending is going to be greatly reduced. Additionally, with very little confidence at the moment in the financials, consumers are going to be spending less. Tech is reliant on a spending economy. Tech is also very risky. With very little lending, the financials are going to be very selective on who they lend to. Tech will be a direct casualty of the reduced lending.
This financial 'crunch' is just like a hickup like the one in 1998 or 1991. Nothing worth losing sleep over.
For one thing real estate bubble in NYC is still well intact prices have not gone down in the surrounding area's. I believe the ONLY reason for this is because most of the economics in this area are VIA wall street over the past few years and WALL STREET has done very well. Now if my theory is correct wall street WILL CUTS bonus's and freeze's jobs and raises in the next year.... THEN Watch out in NYC and surrounding area's with this sub prime mess we will have another major leg down.. From what I understand there will be a trillion dollars in mortgage resets between 2008 and 2009 .. Its interesting could emerging markets really save us??