Huh?!

Geez - what a dog show... When a headline on Bloomberg reads "Stocks in U.S. Climb on Speculation Job Losses to Spur Action on Stimulus" you realise how screwed up the world really is....

Yeah yeah I'm grumbling because my Sasol short has been blown out the water with Sasol moving up sharply today on top of up moves on Wednesday and Thursday.

The world seems to have shrug off the fact that the US has dropped another 560000 jobs in the last month, other major and that companies across the world are planning layoffs...

Some of the other headlines On Bloomberg read:
Consumer Credit in U.S. Declines More Than Expected on Bank Lending Limits
GM Said to Ready Salaried Job Cuts as It Presses UAW for More Concessions
Platinum, Palladium Climb as Investors Turn to Precious Metals in Slowdown

Yip we're all hunky dory... Honestly I don't get it but as they say Mr Market always knows best and he's moving the market up at the moment... at a rate of knots in the US...

So basically we're saying that every time things look bad, we should just buy like crazy on the premise that bad debt issues will simply be addressed by throwing more money at the problem? Surely the world has gone crazy?!

One would presume that with the oil price not going anywhere and the Rand falling to R9.58 to the US dollar - even after our rate cut yesterday - then signs would be there that things wouldn't be looking that great for Sasol... But who knows.

I'm still bearish on the global economy and stock markets in general, but one thing that a couple of traders have picked up on is the movement in the Baltic Dry Index (BDI)... After being slaughtered somewhere in the magnitutde of 97% in 2008, the index picked up a bit in the last few days. Shipping firm Grindrod has responded very nicely locally, as have US counterparts...

The question is - does this movement in the BDI indicate we've hit something of a bottom and traders can start looking at resource shares again? Conventional logic would seem to say that's what the fund managers have done in the last few days to set our resource sector alight.

Is it false hope and going to simply inflate the PE multiples of the resource shares? My humble opinion - yes indeedy...

Again just look at the facts - the car industry in SA has now gone to government to get a bailout. We're shedding a bucket load of jobs, lending is freezing up here locally, car dealerships are going out of business etc. etc.

Dividend wise - Mutual & Federal announced today it wouldn't be declaring a final dividend in light of the turmoil in the markets. If I had to guess, I don't think they'll be the last to do this and when dividends go so does a lot of the investment appeal...

I guess the important thing is not to fight what's happening in the market, but rather have a clear investment strategy.