Flight to Quality
God. It seems that it’s time to break out that phrase again. “Flight to quality”. For me, that is basically step 1 in a downturn. Where a few less than reputable companies report hiccup results. Then the others that haven’t reported bad results start saying there will be a “flight to quality” in a market. But what happens is everything goes down. Like oceans and tides bringing up all boats, when oceans and tides fall they bring down all boats. That’s when people don’t mention “flight to quality” and that’s when I would buy stocks because a sector is trampled and many of the better companies undervalued.
p.s. The original mention that spurred this post was by a video interview with Fred Wilson by Portfolio magazine. I still don’t see why the playas are hating on the magazine. It’s a million times better than Forbes and 100,000 times better than Businessweek and Fortune. If you don’t subscribe to the magazine you should. Video is below.
