Club Mulgoa

Tuesday, February 11, 2014

Baffled

Once upon a time, if the Feds says there will be a trimming of fiscal stimulus, the DJI would just plunged.  That has always been my query.  If there is a trimming, it means the US is well on the road to recovery so it should be better and therefore DJI should go up.  Yet it had been going down.  However, now it is following my logic.

Big mining companies should be suffering now because commodities have plunged in value.  What I didn't considered was, because the big boys are not exploring, not developing new mines, not expanding.... suddenly the market knows they must be awashed with cash.  They have not stopped selling their products.  So now, while the value of their products have fallen, the stock markets will be rushing in to buy them!

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