According to Peter Lynch you should not worry too much about macros. However when you do look at some industries you wonder whether the model allows you to make money at all. For example the airline industry is so badly beaten down that whatever happens I am scared to buy shares of Spice Jet or Jet Airways. This in spite of the fact that I am happy with the services that they render.
Similarly forget the stock exchange indicators from the USA, the real estate indicators are scary. Very very scary.
Too many houses on default, too many in the ‘delay and pray’ category, too many in the repossessed list, many refinanced and re-default category!
The losses that the banks can take is again likely to be in billions of dollars. If Citibank takes a $ 50 billion hit in its books what will it do to the industry? Or the stubborn employment figures which are refusing to go up?
Scary! Any thoughts welcome!!
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