Kind of a mixed day on Wall Street. Dow down 500. Indexes down about 4-1/2 percent. The market stayed open.
Right now, it feels to me like the second round of our fantasy baseball auction.
Our league, the Friends of Freddie, auctions off players in two rounds. In the first round, players who had decent playing time the previous season are auctioned off in a set order. In the second round, owners take turns nominating the remaining players, the prospects and suspects.
The first round is fairly efficient. Rarely do I pick up a player for less than 90 percent of what I think of as fair value. By the second round, a lot of owners have either filled their rosters, run out of money, or don't think the scraps are worth fighting over. As a result, I think that if you put your mind to it you can pick up some decent bargains in the second round. Instead of paying 90-100 percent of fair value, you can pay 50-70 percent of fair value.
My guess is that those banks and money managers that have capital to deploy these days are feeling like it's the second round. There has got to be a lot of stuff out there that is selling for way less than fair value.