peterb: Another key distinction that needs to be made here is the difference between traders and investors. When someone like Jim Cramer makes pronouncements, he is doing so as a trader, not an investor.
Traders look for momentum and investors look for value. Value investing is extremely difficult right now because of all the off-book and off Balance Sheet transactions that are muddying the waters in terms of asset value and company strength (or weakness).
AIG is a prime example. The insurance side of the business is doing quite well, but their various “bets” in the derivatives markets nearly sank the company. Old school Graham’s Theorem guys like me don’t have a good set of metrics to work with and everybody is suspect until proven innocent when it comes to what might be lurking out of sight and off the Balance Sheet.
Point is this: It really is anybody’s guess as to what might happen in the market, and every day brings some new revelation or surprise (England nationalizing a slew of banks, Iceland pulling billions in bank debt onto the country’s Balance Sheet, etc).
While I appreciate the wisdom of spending half an hour a day watching the market, the reality is that there is no way of knowing what the hell is going to happen next. Historical precedent can be illuminating, but can only take you so far.
