I think it depends on what you own..
Just as I am skeptical when something falls 49% in a couple days barring extreme circumstances I am equally un-enthused when the converse happens.
Watch the following discussion:
Now, holders in JP Morgan (JPM) and Wells Fargo (WFC) can be assured that the rally in their share is for real for the simple reason that the sell-off in them was far overdone. A word of caution, this isn’t really so much a rally of enthusiasm that “bad news is done” as much as it is a rally of confirmation of quality. Dramatic share gains from here ,may not be likely but a slow climb probably is.
But, holder of shares in Washington Mutual (WM), Merrill (MER), Wachovia (WB), Lehman (LEH), National City (NCC) and other weak firms ought not get too caught up in what is happening. There are plenty of dark clouds out there still and you are going to get rained in sooner, rather than later. That is not to say we may have seen a bottom but a return to year earlier price levels won’t be seen for a while. There is a very real chance that 6 months from now you are staring at prices level you see today.
All in all it is very good news. For the first time in a long while we are now going to be able to look at individual firms and have some level of expectation that share performance will track firm performance rather than what has happened the past 6 months, everything was killed.
Disclosure (“none” means no position):Long WB,WFC, none
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