The markets are down today, and the pundits know why. It's all very simple, you see:
Deepening concerns about Iraq. I'm not so sure about this. Is Saddam really weighing on investors' minds? When Khrushchev said, "We will crush you," it sent shivers down our national spine. Saddam's threats that an invasion would mean "suicide" at the gates of Baghdad do no more than elicit a national yawn. Really, now, no one is sitting around and saying, "I love my GE stock. But a possible month-long war in Iraq means I have to sell it."
Besides, I believe any negative market sentiment attributable to the threat of war is more than offset by Donna Sheehan. The 72-year-old California artist is protesting America's "naked aggression" toward Iraq by removing her clothes and encouraging women everywhere to do the same. While this may drive down clothing stocks, expect a spike in sales of home electronics.
Consumer sentiment slips; U.S. trade gap swells. I'll be the first to admit that slipping and swelling make me uncomfortable. But that really has nothing to do with the way I invest. I make decisions based on a company's business model and how well it's executing and how sharp its management is, not some vague, cyclical number that tries to nail down the mental state of all American consumers.
Please, let's concentrate on important matters like business models and financials. And whether breast implants qualify as a tax deduction for strippers.
