Just When You Thought It Was Safe

The markets have had an amazing run over the past 6 months, up a dramatic 50% or 60% on a run that has yet to take a breath in the month over month escalation. In a broad sense the  powers of Wall Street have reasserted a discourse of calm, steady as she goes command that in outward appearance and when repeated in cadence by the talking heads of the financial news networks, seems to be putting people in a mood to go back into the ocean of stocks, if only for an ankle deep stroll along the beach. There's an old saying on Wall Street, "If you aren't bullish, don't come to work."

Many remember quite painfully the undertow of little more than a year ago that swept everyone along the shore out to sea. These same voices of reassurance tending the life guard stands today, were no where to be seen, much less heard from during the storm that seemed to rise out of nowhere. But its OK, go on back in for a swim, buy our new IPO, trade a few merging market equities, that whisper of confidence in your ear to push down any lingering thoughts of caution.

Time for a reality check! When the market hit bottom in 1931 and the country was in the throws of the Great Depression it took until 1954 to better the high water  mark reached at the top of the 1929 bull market. Unemployment bettered 25% crushing the consumer industries of the roaring 20's. GM and Chrysler didn't go bankrupt this year because their cars aren't competitive with the foreign autos, but because the american consumer is, like the U.S. auto industry, collapsing under its own weight of debt and bad economic decisions.

This rally is plain dangerous if it lures you into the trance that Wall Street would like to put you in, again. The decline isn't over and stocks are not the key to buying anything you want in the Robb Report. If you must buy, place your money on strong balance sheets, Bank America (NYSE: BAC) has over $140 billion in cash and will be long remembered here and abroad as an enduring symbol of american business strength. General Electric (NYSE: GE) probably the most recognized industrial company in the world is slowly reasserting itself as the manufacturing and services company that can bridge the old and new economy like no other. And if you believe, and heaven knows you should, that all of these little bytes of information that companies and governments are storing on all of us computer using consumers will need to cataloged, shuffled, diced and distributed as e-marketing, then you must own EMC Corp (NYSE: EMC) the heavyweight of data storage systems.

By careful out there, the weather is going to get really rough. And soon.