The financial community right now is in melt-down and many think that the world is coming to an end. The question many are asking if the investment banking model is dead?
Answer, no, it will just morph. The thing about finance is that it works until it does not work anymore. So right now things are not working for the classical investment banks. Companies like Blackrock will move from second tier to first tier. Nothing wrong with that. I also noticed that the CEO and other partners at Blackrock are making the financial news channels rounds. That tells me that they are moving into a first tier status.
What is completely disingenuous are the words from commentators that say we will have to completely rethink things, and "cash is king." The reason why they say that is they need cash, and they need to rethink things. But what they need and what you need, need not be the same thing.
I actually think completely the opposite. NOW is the time to look at the markets. In fact right now the retailer investor can snap up bargains that the institutional trader can’t. The institutional trader would love to make money, but due to the Lehman bankruptcy they have to go back in leverage, and they have to unwind positions. Those that have cash can smile and merrily pick up stocks that have been beaten to a pulp.
Here is how I would proceed. Take a look at the stocks that interest you. Do some valuations and put in a "fair" price. This means don’t put in a 2 USD bid for Microsoft or 10 USD bid for Apple. That just ain’t fair. Put in a fair value and wait! Also don’t just put in one bid. Put in a dozen or more, all fairly priced. Remember the key here is to manage your risk and manage your portfolio.
What we have here is a falling dollar and falling oil! That is called FEAR!!! I am actually very bullish! As Buffett says, "when others are fearful you need to be greedy!"