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Nobel Laureate President Obama !

I was pleasantly surprised to hear that Obama won Peace Nobel Prize. My first reaction was "so soon" ? It has been just 9 months since he has become President and has not done anything significant when it comes to peace except changing the course of American foreign policy from "go it alone" to "engagement" and some olive branches to Iran, Korea and in general to Muslims. Looks like previous administration was so much dis-liked by world that any small change in policy seems to deserve Nobel Peace prize. In my opinion, this award is more for "hope of peace" than actual "achievement". This would put burden (for good) on Obama to:
  • Finish the two wars America is fighting and get out of Iraq and Afghanistan
  • Bring Iran and North Korea to discussions table and have meaningful dialogue about nuclear disarmament
  • Finally reach Israel-Palestinian peace (which started in 1990s) and create two nations living side-by-side
If he can achieve these in next 8 years, he can rightfully claim this peace award. He definitely has intentions, drive and charisma to achieve these.

Markets seem to be in good mood and other than first week of Oct, do not seem to have any October blues. With economies showing some life (confirmed by first rate hike by Australians) and first DOW company (Alcoa) showing surprise profits, all signs are pointing to DOW crossing 10000 before Thanksgiving. I would not be surprised if it crosses in Oct itself. However question is whether it can stay above 10000 for sustained period. There would be lot of upside surprises in the results since analysts are expecting S&P companies to have profits which are 25% below Q3CY08. However come Jan 10, analysts are expecting 35% rise in profits compared to year ago. That would be difficult to beat unless revenues rise significantly - means economy has to grow over 4% in Q4 and unemployment starts coming down.

So my advice is enjoy the ride up in next 3 months during this holiday season but be careful in early part of next year. Coming to stock recommendation of the week: Stay in cash. I am looking at istar financial (SFI) at around $2.50 to 2.60. Going by its preferred shares (SFI-D, SFI-E), there are good chances that this company would survive. In that case SFI should go above $4 in 12 months.

Have a good weekend !

/Shyam

Comments

Anonymous said…
Your "Obama Vs Peace Nobel Prize" write up is exactly what come to most our minds. Now he have lots to work up to!

I look at SFI, it seems cheap but a bit risky in short term.

Abdeli
6:06 PM
Sudarsan Vasudevan said…
Hi Shyam,
I thought it was a brilliant move by the Nobel committee to give President Obama the Nobel Peace prize. I look at this as a pre-emptive strike, one I hope they will do to every future first-term US president in the first year of presidency. It gives the US presidents one more reason to think one extra day before they initiate the next war because somebody insulted their father! :)

Regards,
Sudarsan.
3:19 AM
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