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Local financial experts say the worst is yet to come
Published October 9, 2008 - BizTimes Daily
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Today is the one-year anniversary of the Dow Jones Industrials Average's all-time peak of 14,164.53, but that milestone is a distant memory to investors this week.
The Dow is a mere shadow of its former self, sustaining another triple-digit decline this morning to trade near the 9,090 mark.
Likewise, the BizTimes Stock Index, which tracks the combined value of stocks of publicly traded companies based in southeastern Wisconsin, plummeted 2.46 points to 104.67 Wednesday, its lowest point since the index was created in 2002.
Local stocks showed few sparks of life this morning. The largest local decliners this morning were Marshall & Ilsley Corp. (down $3.49 to $13.96), Associated Banc-Corp (down $1.03 to $15.45), Kohl's Corp. (down $1.28 to $35.87), Fiserv Inc. (down $1.09 to $37.73) and Johnson Controls Inc. (down $1.17 to $24.21). A few local companies posted gains this morning, led by Bucyrus International Inc. (up $1.43 to $30.65) and Badger Meter Inc. (up $1.08 to $33.65).
At a Milwaukee Press Club Newsmaker Luncheon on Wednesday, three local financial experts said they do not believe the economy his hit the bottom yet.
"I think it's probably going to be deeper and longer than most people think," said Michael Sadoff, investment advisor at Sadoff Investment Management LLC in Milwaukee.
Sadoff said he expects some "mini-rallies" before the stock market settles into its true bottom.
Michelle Picard, vice president and principal at Geneva Capital Management Ltd. in Milwaukee, said history has shown that the stock market will continue its descent until "it no longer falls on bad news."
The analysts predicted that many American companies will go out of business because they cannot find access to capital.
William McGinnis, a chartered financial analyst and founder of W. McGinnis Advisors LLC in Milwaukee, said, "I think the biggest risk is the credit collapse … We've got to get that moving again."
