What Economic Recovery?

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Friday will bring in yet another Jobless Claims report and the ensuing rise or fall in the E Mini futures, stock market, et al. It appears as if the market is gearing for a negative report as stocks have been declining ahead of the report.

Pundits, writers, and analysts constantly put forth the notion that “investors are jittery as they look to determine if the economic recovery will be sustained.” The eternal optimism is great, but what about reality. My personal opinion is that if we simply look to unemployment as a barometer then we are in for more bad times before it gets better. I am not an economist, not am I a quant master. What I am is a business person who knows a good amount of other business professionals. Why does this matter? I follow my own index. Let’s call it the Scot Index. In the Scot Index, I evaluate the level of unemployment of college educated professional people in my circle of friends and business associates. Right now my Index is very near its lifetime high mark. Out of my closest circle of about fifty professionals/friends, I know of eight that are out of work. Some of these people have been out of work for over a year.

Is this a recovery? While you could make a case for being at the bottom and “we can only go up from here” mentality, I personally can’t embrace that thinking. I think we have more bad times ahead until the Scot Index vastly improves.

What can you do if the Scot Index is at low ebb? Focus on investing methods that can flourish in both up and down markets as opposed to trying to buy stocks or that are cheap, hoping for a recovery.

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