Since 2003, we experienced an abundance of capital that led markets to reach record highs. Credit was available to anyone and everyone. Companies could finance just about anything and just about any random Joe could buy a house. However, it appears that a new era is starting.
Companies that financed their growth out of the excess cheap credit available will now have problems. If you own any type of growth stocks that have financed themselves completely through this cheap debt, pressing the sell button is probably a good idea. The current credit squeeze will ease, but credit will no longer be as readily available.
Companies with higher levels of cash flow are probably better investments. Moderate growth will probably be the new trend and companies that can finance its operations in this environment will advance.
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I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.
Tim Ramsey