Don’t touch the equity

My view is that it’s not over yet. Whatever things are happening (Brown bailout of UK banks, US bailout of US banks, EU bailout of EU banks), it’s not the ninth inning yet.

The crisis is moving from wall street into main street. Consumers are stretched, a lot of corporates are doomed to fail or suffer severely, starting from retailers and house builders. There is a lot of uncertainty, and the house market hasn’t bottomed yet. Also, corporate has yet included worsened economic conditions into their guidance.

Even if the equity market is down 30% from the top, I would not buy equity. There will be better times in the months to come. If not, just thing that nobody has ever gone bust for missing the bottom, many have for trying to catch a falling knife.