Wednesday, November 29, 2006

看长线心得

The most important factor for middle-long term is liquidity.

So we should look at following criteria:
1. cash reserve
2. interest rate
3. inflation rate
4. economy growth

which means when there's tons of cash (held by government, companies, individuals etc), interest rate not going up, inflation tame, economy not recession, market will go up until some or more of the criteria break.

The rally from August just verified above criteria when Fed stopped hiking, and CPI, PPI below expectation.

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