Can I open my eyes, yet?

I've been keeping my eye on solar energy stocks, lately, particularly First Solar (FSLR) and Suntech (STP). I've been on the sidelines since September waiting for signs that the worst is over (I'm not sure we've reached that point, yet), before I make a play.

Suntech was my leading candidate to get my money, but then I read a few articles that were very pro-First Solar in this space, citing Obama's stance on "buy American" (Suntech is Chinese) as well as other reasons. I have long held the belief that a monkey can do as well or better than most equities analysts and this is yet another sliver of evidence.

In the last month and a half or so, First Solar has plunged from about $160 down to just above $100. Mind you, Suntech hasn't fared much better. But my point is that this is not the kind of market to be investing large amounts of cash in any stock.

Since the market started nosediving last September, countless "savvy" analysts have been shouting from the rooftops that this is an opportunity to buy stocks really cheap, and while that may be true, it's only true if you have a long horizon on your investment. Most people don't want to wait that long. I think it wiser in circumstances like this to put your money in a safe vehicle like a money market fund where you'll make a little profit and it's 100% safe. Then, when the broader market has stirrings that it is ready to embark on a sustained rally, gradually make incremental moves into equities.

How many people have been burned twice or more since September due to false starts in the markets? Meltdowns like this do not correct themselves in a month or two. Millions of people foolishly sunk the rest of their hard-earned cash the moment the market had a 2 or 3% pop only to watch it sink another 5% in the days that followed. And this has been repeated several times.

I hate to say it, and I've been saying this for several years, long before it became "fashionable", that we were headed for another depression almost as bad as the Great one. I imagine it will take years to come out of it. It doesn't mean that the news will all be gloomy. But we need to manage our expectations.

I'm not convinced that we have hit bottom, yet. We may have seen the worst of the layoff announcements--maybe. But we certainly have not yet seen the effect of those layoffs, meaning the reduced spending of those unfortunate workers and the effect that will have on bottom lines to businesses going forward. Not to mention the reluctance of the lucky ones to spend for fear they are next for the chopping block. Tread carefully, my friends. And always, always be sceptical.

Money!

I've been putting off writing about the stock market, but I can't ignore it any longer. The economic news keeps getting worse and worse and the indexes keep going higher and higher. Something's got to give. I've been out of the market for several months, having exited before the major carnage started, but I've been reluctant to get back in the water, fearing there's sharks just below the surface.

It's possible that the market dropped too low and has corrected itself, but being a pessimist by nature, I am more prone to believe that the recent recovery is a "dead cat bounce". As far as I'm concerned, we have not yet seen the devastating effect all the layoffs are to have on the economy. Everyone is cutting spending. And that includes those lucky enough to have a job right now. They're scared #$!2^@# that they're next on the chopping block...and they probably are.

This sort of situation tends to be a catch-22. The more layoffs there are, the less spending there is. The less spending there is, the worse the economy gets. The worse the economy gets, the more layoffs there are.

I am going out on a not-so-long limb and declare that this thing will get much worse before it gets better. I know I'm not the only one predicting doom and gloom, but I have been posting, chatting, e-mailing and conversing about the emergence of third world countries and the possible economic collapse of the United States for almost 20 years now.

Having said that, I pray it doesn't turn out as bad as I have imagined it, for that would not bode well for the whole world and especially Canada, America's largest trading partner. One bright note is that the emergence of third world nations has provided a much needed diversification of trading partners. If an economic collapse of the U.S. had happened ten years ago, the entire planet might have become "the third world". Today, there's a few others to do business with.

One last thought, and remember, you heard it here first (at least if I am right), I see the American indexes dropping below their previous lows in the coming months. I'll join the market at that point because I expect slow and steady gains going forward for the foreseeable future. However, I'm not giving refunds if I'm wrong.