Mods: please let this post stay up as it does not represent a bash, a mindless pump, or a personal attack. It represents a view of the forces at play in the markets now, and I am advising caution in playing CGS because of how this sector tends to react in an amplified way relative to the US markets.
Macroeconomic effects are dominating stock market now. For the next few months, no matter how low of a price you buy a CGS, the amplified selloff in US markets will have a much stronger correlation with share price movement than any company specific trends. Whenever world/US news is negative, stocks without a positive news will selloff without any specific reason, and those stocks with major catalysts - such as acquisitions or impressive earnings, will see those PPS spikes completely erased within days due to the current macro climate.
A CNBC article predicts that markets won't stop a downward trend until the final debt deal is worked out...hold your breath, errr, I mean wallets until then.
A solution that will restore confidence is a LONG way off since Congress seems diametrically opposed on how to solve those problems. The US watches Europe and sees its own future in the mirror, so stocks are going down and anti-spending activism is going up. Oddly enough, the one workable solution that won't kill too many domestic jobs, the budget cutters won't even consider (i.e., closing 700 bases to babysit in countries that had wars 40, 50, or 60 years ago). Somehow, that is supposed to be a priority over education and jobs here in this country.
The top 2 percent pay taxes on income, capital gains, social security, and medicare/medicaid that total less than 20 percent of their total income due to the ceiling structure of taxes on the latter elements, yet the middle class's total tax burden averages over 30 percent. Lobbyists are making sure that any tax reform won't upset this upside down tax triangle. This is also going on at the state level.
Massive government spending cuts are soon to happen that will decimate Federal jobs and contracting from highway and transportation departments, drug, food, and environmental programs, and higher education assistance. At the state level, similar actions are also taking place.
These spending cuts will put millions of additional middle class citizens out of work, greatly increase unemployment, erode the tax base, and skyrocket public school college tuitions. My state just increased in-state tuition 17 percent this fall. My son is no longer going to school as he cannot save fast enough to keep going and I cannot risk NOT saving fast enough to have a few pennies left in my pocket when, not if, I lose my job in 6 months to a year as this "trickle-down" job loss impacts every sector.
