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DOW: 6 year low, GE: 14 year low - what's ahead ?

Last 2-3 weeks have been pretty bad - that is an understatement considering the mayhem in the markets and portfolios across world. Unfortunately there does not seem to be an end in sight. Dow is already nearing 50% loss from its peak and is at 6 year low. Many many supposedly blue-chip companies are trading in single digits with bluest of blue (GE) heading into that direction and trading at 14 year low with yield more than 13% at current dividend. There are talks about nationalization of Citibank, Bank of America and maybe Wells-Fargo.

So where are we heading - considering my recent record, I should stop making predictions (same is true for many pundits on CNBC and prestigious universities across world). The honeymoon period with new President seems to be over. Obama is trying his best to instill confidence but market and people don't buy into it.

Markets would continue to do downward and may even touch 7000 (marking 50% loss from its peak). It is not far-fetched assumption since DOW was down 83% from its peak during great depression before it started bouncing back. Hope it does not get that bad.

So for now, best bet is hold onto cash and wait few months for this bank nationalization issue to be sorted out.

Good luck

/Shyam

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