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Foreign Growth

November 19, 2010 – 7:49 pm

Earlier in the week South Korea raised their interest rate to slow down their growth in an effort to slow their inflation. China which already raised rates a week ago ordered its bank to increase their reserve requirements this morning which in effect means they are trying to slow their lending which will slow the economy. In Asia it’s a common theme, too much growth has increased inflation thus government intervention.

That of course put some downward pressure on our market at the opening. I always find it fascinating that our stock prices will fall on announcements of this kind. China and South Korea will not push their markets
into a recession, that is not in the cards. They are only trying to control inflation and that should be looked at as a good thing. Also, their growth is too fast, Doesn’t that mean better earnings not falling earnings? I understand the fear. Fear that they may go too far and tip us all back into a recession, but it is fear not fact.

This two week weakness in stock prices is setting up a very good buying opportunity. Buy those stocks that you missed and wanted to wait for some weakness to buy. This is the weakness we were expecting and you were waiting for.

Good Trading,
Steve Peasley

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