The DOW had it’s worst day in 7 months due to Saudi Unrest. How much worse do you think this problem will get? Do you think this will continue? Why, or why not?

To answer your question, I gave up on trying to predict the stock market a long time ago and I would be leery of anyone who sounds confident in doing so. However, for the fun of it, if I had to, I would say it will get worse because I believe there is still too much speculation and not enough actual value in the stock market currently.

Speculation in the stock market tends to inflate the index; then adverse social events world-wide cause speculators to retreat, selling off investments. Speculators tend to view their investments in the stock market as short-term (which is a mistake) making the stock market oversensitive to those adverse world events. It doesn’t look like there will be many quiet days ahead as we see more and more people of middle eastern countries taking the challenge (begun in Iraq) to shake off the grasp of the petty despots and tyrants who’ve subjected them to so much misery for so many years. That being the case, I would expect to see more nervous speculators selling off investments.

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