As Of: September 17, 2001
Life Continues
Absence Of Buyers Marks Market Restart
After the tragedy of 9/11, it was hard to think in terms of "business as usual" when the stock markets reopened on September 17th. It was a victory that the markets could reopen as smoothly as they did, but it was disappointing to watch the sellers take the day due to a lack of buyers. Understandable, but disappointing.
The stock market had already suffered a steep sell-off prior to this past week's events, and appeared to have arrived at an "over-sold" condition from which a rally could be expected. Indeed, the futures market on 9/11 predicted a strong opening for stocks prior to the occurrence of the disaster at the WTC.
While the uncertainty of a war on terrorism will naturally introduce a new perceived level of risk into the business environment, the fact is that life will continue, and the business of life will continue also. While some companies have clearly been hurt, others are as strong as ever and well positioned for the future. A lot of investors are inhibited by fear, confusion, and grief. Thus we have a lack of buyers right now, and the pressure on the market is down. At some point (hopefully sooner rather than later) investors will come to the realization that there are some real bargains to be had, and the market could enjoy a substantial rally. This is an excellent time to get in front of other buyers and be in place for the recovery that will inevitably come. This is a time to be thoughtful and careful, but a time to express your belief in the long term strength of capitalism, and to profit from your convictions.