There is much uncertainty in the current market environment. Rumors of government bailouts for the mono line insurers, are countered by fears of ever larger write offs. Populist politicians target business, success and free trade with echos of the 1930’s. The current environment has the distinctive 1970’s jimmy carter feel with taxes and regulation looking to increase. There is simply no confidence, weather it be in leadership, economics or politics. So what’s an investor to do?
The one certainty at this point seems to be the increasing inflation rate so the higher probability bet is to focus on making money off inflation instead of trying to bet which way the sub prime mess is going today. Again and I repeat commodities ,metals and mining, gold, agro and energy.