"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

For almost two years (2006-2007) I became increasingly bearish on the stock market. I preached, to almost the point of exhaustion, why I thought the real estate bubble, and massive consumer debt would cause a recession, and a severe credit crunch. It took 12-18 months for my negative views to become reality, but now I am singing a different tune.

The bad news is upon us. The problems are known. The problems are also being aggressively addressed by governments around the globe. This concerted effort- with help from trillions of dollars in capital- will eventually transition the global economy from contraction to expansion, and a bear market into a bull market. How long will it take? About 12-18 months, the same amount of time it took for my negative views to unfold.

The dismal down period is, in my opinion, the transitioning stage of a bear market into a bull market. This cyclical bottoming period is known as the accumulation phase, and no one knows this better than Warren Buffett.

Recently, Buffett (one of the world's richest men) has been deploying his mega billions into the market. He has allocated funds to General Electric (GE) and Goldman Sachs (GS).

Its interesting to watch the difference between the rich and the average investor. As Buffett was investing billions over the past few weeks, today we learned that the investing poor withdrew $65 billion from Mutual Funds last week, $8.8 billion on Friday alone. This is a classic case of how the rich get richer while the poor get poorer.

The rich get richer, and the poor get poorer because of a difference in mindset. No amount of wealth redistribution or affirmative action can change a persons mindset. We all possess the ability to govern our lives the way we wish. Some investors buy stocks when the Dow is at 14000, while others choose to sell. Some investors sell stocks at Dow 9000, while others choose to buy. Attempting to punish those who make different decisions and eventually prosper is a moral injustice.

The stock market decline over the past month was due to fears over a potential depression. Now that those fears have been dispelled, the next decline or retest of last weeks lows will be over that fact that the economy has materially slowed.

The fears from last weeks "Depression Alert" are winding down, and will eventually disappear. Credit will become more available, inflation fears are subsiding, and lower energy prices will act like a tax cut on the consumer. This means more spendable income which will eventually be reflected in the economy.

In short, I am no longer a bear. Any retest of last weeks lows, in my opinion is an opportunity to increase exposure to the stock market.

I realize its tough to buy when times are tough, and the news is bad, but it's all about mindset, isn't it? Here's a Warren Buffett quote;

"I want to buy when stock prices are down,...way down..."