Friday, January 23, 2009

You Are Not Smarter Than The Market

The market is almost always smarter than you:
State Street (STT) remains down about 50% today after warning on earnings and raising concerns about serious damage to its balance sheet. But today aside, let's go back to last November when, seemingly out of nowhere, the stock fell below $30, beforre quickly rebounding to the mid-$40s. At the time, everyone thought the market was crazy. That there was no way there could be anything wrong with State Street -- a boring old investment services company.

Well, turns out, only the talking heads were wrong. The stock market nailed it, only it didn't punish the companyt hard enough, since now State Street is at about $19.

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