Futures for the Dow Jones Industrial Average, the S&P 500 and the NASDAQ were mixed, pointing to an uncertain start on Wall Street today. Asian markets were up .2$ to 2.8% with the exception of Japan which was down 3.1% on bad economic news. European markets are down about 1% reacting to growing concern about the absence of former American checks and balances and the proliferation in the news of overt political dishonesty and government pork bills.
Inflation and interest rates are set to rise this decade as it did in the 1970s. China so far has bought more than $1 trillion in American treasury debt, but Beijing is seeking to pay for its own $600 billion economic stimulus package as the Chinese tax revenue falls, exports fall, and their economy slows. Beijing is starting to keep its money at home. Chinese bankers are being instructed to lend more to local governments to allow them to build new roads and other projects as part of their stimulus program. However the US bailout apparently will be funded by printing money not by borrowing. That will set America up for a round of inflation that we have not seen since Jimmy Carter. Jimmy Carter and Jane Fonda were credited with scaring young people into thinking nuclear power was too dangerous to exploit. That gave Europe a forty year head start building a safe alternative 1000 year supply of alternative energy.
The new administration and their fawning Pravda type government subsidized media adulation society continue to distort facts to make things appear worse than they are and thus lower expectations of the new administration. When they want bad news they quote raw data that is not adjusted for population growth or seasonal factors. For instance industrial production always peaks in the fall in preparation for the holidays and shuts down in December. Employment peaks in December and declines in January. Therefore they should be adjusted to remove the seasonal decline or else it miss-informs the American public and presents a false conclusion this month that the economy has tanked even if nothing has changed from last year. That makes Bush look worse and lowers expectations for Obama’s performance. For maximum distortion bad news is now quoted in raw numbers and good news uses data corrected to remove any positive distortion. Later when they want to distort the facts to make Obama look successful they, like Pravda, will remove reverse the process.
The proposed bailout bill gives hundreds of $millions to public radio, public TV and to performers thereby rewarding all who have fawned and gushed over the president.. Freedom of the press and free speech were once needed to protect the media when they protected the American people by reporting government abuse. But now that they are a government propaganda machine they use their freedom to attack dissenters instead. The American people can see that this administration and their socialist leaning propaganda machine have been attacking dissident radio and TV hosts and an American reaction to this new political machine is growing.
Yesterday President Obama attacked Wall Street’s obscene bonuses when quiet investigation and recovery procedures would actually help put an end to them. Direct attacks do not correct the abuse but it tells Wall Street that they and American Shareholders fall very low in the opinion of socialists. Corruption and tax cheating spreads insidiously when elected officials say everybody does it and it is just the way to succeed in what you do. Obama indignation does not stop corruption, we need the FBI involved. When socialists nationalize… the shareholders lose and industry management positions are given as payoffs to the political supporters the same way they hand out ambassadorships to the biggest contributors.
Yesterday’s stock market decline accelerated when President Obama criticized greedy executives after giving a tax cheat a cabinet position and just as corrupt Illinois governor Blagojevich defended himself saying his $100,000 fee for supporting gambling legislation was the way things get done in American politics.
Still the American economic system shows its strength and resiliency as Americans consider the facts and begin to think about booting the corrupt self serving political machines out in two years. We remain optimistic that the market will recover and with it Americans will recover their savings plan loses.
Friday, January 30, 2009
Thursday, January 29, 2009
The window of opportunity continues as we hold positions
After three days of advances the futures indicate the US markets will start lower this morning reflecting European trading which is currently off about 1.2%. However Asian markets were up significantly last night with Hong Kong up 4.6% and Japan up 1.8%.
Both the NASDAQ and NYSE composites broke well beyond their 50-day moving averages resistance levels yesterday on about 5% higher than average volume. There appears to be reluctance to short stocks that are already beaten down to historically low levels.
Yesterday the Fed decided to keep the federal funds rate, used by banks to set rates paid on many types of consumer and business loans, to a range between 0% and 0.25%. The Fed said the worst will be over this year and recovery will begin by the end of the year.
Other good news is that our two party system did not collapse and President Obama did not get Republican support for his do-too-late political jobs plan. Wednesday he said that the country needs immediate action to solve rampant job loss. But his bill doesn't do that. His bill sets up government subsidized jobs one to two years from now. The new president is rapidly losing credibility. Americans do not want a third world economy. Americans do not want the kind of government economic programs they see used in Bangladesh, Nigeria or Rumania or political hack hiring socialist programs like they have in Detroit and Chicago.
The market climate for stocks remains characterized by favorable valuations and favorable market action. Depending on today’s activity we may stop cherry picking out of the market as we have when stocks rise into a 25% to 40% range and begin to hold stocks longer.
We believe we are still in the secular bear market that began in 2000 and will probably last through the year 2010. Looking back on this decade we expect we will see many similarities to the decade of the 1970’s, including peaking energy prices and inflation. Even Obama is beginning to look a lot like Jimmy Carter who started as a breath of fresh air and ended with a failed foreign policy and record inflation. Only we expect President Obama will leave us in a worse state because he wants to nationalize and expand the corrupt practices of unions and one-party socialist politics. He wants to take the right of a secret ballot away from workers so that, as in Communist countries, dissidents can be caught and punished severely. In America we sometimes don’t even find their bodies when they upset the unions.
Using the 1970’s as our model we can expect wide swings in market prices. The 1970’s was a decade of books declaring the coming of economic depression. Only then, we tended to postulate that the Mid East would pull our plug and now we postulate that China will pull it. But when you think of the consequences, China really can’t pull the plug without losing their money because it becomes worthless as we saw with the recent collapse caused by the politically inspired and defended corruption of the mortgage industry. If a mortgage lender was honest and would not loan to ineligible people he was called a racist and cut off by Fannie and Freddie. They were forced to squander American taxpayer and investor money by the US Senate banking socialists who now have influence over the entire executive and legislative branches of the US government. The 1970’s had several opportunities but was a dangerous time for those who bought and held stocks or who timed the market badly.
Both the NASDAQ and NYSE composites broke well beyond their 50-day moving averages resistance levels yesterday on about 5% higher than average volume. There appears to be reluctance to short stocks that are already beaten down to historically low levels.
Yesterday the Fed decided to keep the federal funds rate, used by banks to set rates paid on many types of consumer and business loans, to a range between 0% and 0.25%. The Fed said the worst will be over this year and recovery will begin by the end of the year.
Other good news is that our two party system did not collapse and President Obama did not get Republican support for his do-too-late political jobs plan. Wednesday he said that the country needs immediate action to solve rampant job loss. But his bill doesn't do that. His bill sets up government subsidized jobs one to two years from now. The new president is rapidly losing credibility. Americans do not want a third world economy. Americans do not want the kind of government economic programs they see used in Bangladesh, Nigeria or Rumania or political hack hiring socialist programs like they have in Detroit and Chicago.
The market climate for stocks remains characterized by favorable valuations and favorable market action. Depending on today’s activity we may stop cherry picking out of the market as we have when stocks rise into a 25% to 40% range and begin to hold stocks longer.
We believe we are still in the secular bear market that began in 2000 and will probably last through the year 2010. Looking back on this decade we expect we will see many similarities to the decade of the 1970’s, including peaking energy prices and inflation. Even Obama is beginning to look a lot like Jimmy Carter who started as a breath of fresh air and ended with a failed foreign policy and record inflation. Only we expect President Obama will leave us in a worse state because he wants to nationalize and expand the corrupt practices of unions and one-party socialist politics. He wants to take the right of a secret ballot away from workers so that, as in Communist countries, dissidents can be caught and punished severely. In America we sometimes don’t even find their bodies when they upset the unions.
Using the 1970’s as our model we can expect wide swings in market prices. The 1970’s was a decade of books declaring the coming of economic depression. Only then, we tended to postulate that the Mid East would pull our plug and now we postulate that China will pull it. But when you think of the consequences, China really can’t pull the plug without losing their money because it becomes worthless as we saw with the recent collapse caused by the politically inspired and defended corruption of the mortgage industry. If a mortgage lender was honest and would not loan to ineligible people he was called a racist and cut off by Fannie and Freddie. They were forced to squander American taxpayer and investor money by the US Senate banking socialists who now have influence over the entire executive and legislative branches of the US government. The 1970’s had several opportunities but was a dangerous time for those who bought and held stocks or who timed the market badly.
Wednesday, January 28, 2009
The US stock market is ready to surge again but group-think is now a long term threat to prosperity.
Asian markets not on holiday generally closed higher with India up 1.8% and Japan up 0.8% last night.
European markets are up about 2.8% this morning. American market futures are up sharply as well.
Remember that the dangerous situation we faced in previous weeks was rapid market decline with low volume? That was dangerous because it indicated that the slightest amount of market cash outflow could be devastating.
The volatility index (^VIX) rose almost 25% over those three dangerous weeks indicating market instability leading up and through the inauguration. Now the situation has reversed. VIX has now settled back down and the market now at last has the ability to rise sharply on very low volume. The hedge fund hedging appears to have returned closer to the bull market level of less than 30% short hedging of a 70% long position. At this point hedge funds still could be forced into short squeeze buying if the market begins to rise sharply. That would result in the opportune time to take profits while letting a smaller investment position rise further. We recommend start taking profits in the 25% to 40% gain range and not be greedy.
Remember, our timing method does not pick a market top or a market bottom it selects windows of opportunity about the tops and bottoms when the market is whipsawing up and down preparing to change direction. There is also a lot of sector rotation going on at that time so one needs to be alert to take advantage of short term stock peaks and sell offs.
Current indications are that investors should probably not start taking profits for at least two weeks. As we have said before our indicators are saying market stability is getting firmer again so the bull market run probably will last at least through February and we can wait longer to sell.
Long term however, it appears the new administration is doing everything FDR did initially to turn a Hoover recession into the FDR depression. FDR recreated the corrupt government job spoils system that existed before Charles Lyman and Teddy Roosevelt put in the first federal merit system and purged federal career positions of incompetent and corrupt party hacks.
FDR even tried to stack the Supreme Court after he first took complete control of the House and Senate. It was only then that Americans began to get fed up with the power and corruption of group-think. Truman was selected as FDR’s last running mate not for intelligence or competency but because Truman was the only Democrat candidate most people still felt they could still trust because he was a loose cannon not a group think candidate. Truman was the last of that dynasty of central power… but control of Congress returned and lasted forty years until 1992 when we began our nation’s greatest growth period of productivity and prosperity. After that we returned to an unpopular group think congress and now we have two branches of government group think. Socialists just love group-think where everyone checks their brains at the door for the satisfaction of belonging to the group. That was what President Obama asked Republicans in Congress to do just yesterday.
Good luck on your investment journey.
European markets are up about 2.8% this morning. American market futures are up sharply as well.
Remember that the dangerous situation we faced in previous weeks was rapid market decline with low volume? That was dangerous because it indicated that the slightest amount of market cash outflow could be devastating.
The volatility index (^VIX) rose almost 25% over those three dangerous weeks indicating market instability leading up and through the inauguration. Now the situation has reversed. VIX has now settled back down and the market now at last has the ability to rise sharply on very low volume. The hedge fund hedging appears to have returned closer to the bull market level of less than 30% short hedging of a 70% long position. At this point hedge funds still could be forced into short squeeze buying if the market begins to rise sharply. That would result in the opportune time to take profits while letting a smaller investment position rise further. We recommend start taking profits in the 25% to 40% gain range and not be greedy.
Remember, our timing method does not pick a market top or a market bottom it selects windows of opportunity about the tops and bottoms when the market is whipsawing up and down preparing to change direction. There is also a lot of sector rotation going on at that time so one needs to be alert to take advantage of short term stock peaks and sell offs.
Current indications are that investors should probably not start taking profits for at least two weeks. As we have said before our indicators are saying market stability is getting firmer again so the bull market run probably will last at least through February and we can wait longer to sell.
Long term however, it appears the new administration is doing everything FDR did initially to turn a Hoover recession into the FDR depression. FDR recreated the corrupt government job spoils system that existed before Charles Lyman and Teddy Roosevelt put in the first federal merit system and purged federal career positions of incompetent and corrupt party hacks.
FDR even tried to stack the Supreme Court after he first took complete control of the House and Senate. It was only then that Americans began to get fed up with the power and corruption of group-think. Truman was selected as FDR’s last running mate not for intelligence or competency but because Truman was the only Democrat candidate most people still felt they could still trust because he was a loose cannon not a group think candidate. Truman was the last of that dynasty of central power… but control of Congress returned and lasted forty years until 1992 when we began our nation’s greatest growth period of productivity and prosperity. After that we returned to an unpopular group think congress and now we have two branches of government group think. Socialists just love group-think where everyone checks their brains at the door for the satisfaction of belonging to the group. That was what President Obama asked Republicans in Congress to do just yesterday.
Good luck on your investment journey.
Tuesday, January 27, 2009
Will we have a drawn out Obama Depression or will we have direct stimulation soon from the US Treasury
Much of Asia is on holiday welcoming their Lunar New Year. Japan was up almost 5% last night. Japan is throwing a $16.7 billion lifeline to their companies threatened by the credit crunch.
European markets were up over 3% yesterday and are presently giving back about 0.75% because they got out way ahead of the American rally.
The futures for American markets are again up fractionally today. The market appears to be bouncing upward again and there is a good possibility that the window for cherry picking out of the market will extend more than a month. Also, although it has not happened in the past two years the cracking of the sell window could prove premature (in as soon as 10 days) if this trend continues. However it is always good to take profits when stocks rise 20% to 40% or more in a short period of time because the probability of holding rapid gains is usually very low. It is a good policy to cherry pick out partially but let some of the investment run upward when fortune smiles.
Yesterday we discussed the culture of poverty, of the negativism and the relishing of a vision of victimization as a rationale for not trying. Poor people are often considered lazy because they often see no value in trying when the cards seem stacked against them. They often seem to want to do things in such a way as though seeking to fail and thus fulfill their negative beliefs. The culture of poverty seldom gets into a leadership role except in third world countries such as 1930’s Eastern Europe under Communism and current equatorial Africa under dictatorships. Generally today in such places the successful farmers and middle class are murdered or driven out and replace by militant partisans who support the state. Each industrious working family that is displaced provides a temporary source of goods and money that the partisans divide up as their reward. Eventually there is no longer any incentive to succeed because the system enslaves the industrious. Poppy plants tend to be a crop of choice. In order to survive without drug trade it is often necessary to invade surrounding countries to enslave them and exploit their wealth. These negative cultures of poverty believe they are justified in exploiting the industrious people who they incorrectly blame for their poverty. Their poverty is the direct result of their negative exploiter-victim belief system.
Our primary problem right now is our culture of debt. We want everything now and to pay later. It increases demand for goods and initially leads to prosperity. From Keynes to today this philosophy has grown in Western nations. In the last eight years it took over the Republican Party which had previously been able to claim to be the party for fiscal responsibility. In this past election we had no candidate at all representing fiscal responsibility. Great Britain has had the longest experience with this problem and if we want to get out of this recession quickly we would do what the British do. They are rapidly devaluing their currency at this moment. By devaluing their currency the real value and cost of British debt is reduced proportionally to the devaluation of the pound. That causes inflation in the prices of imported goods and helps balance their trade while providing jobs at home. Unfortunately it is addictive and encourages debt and is the reason the world no longer is based on the British pound but it is now based on the American Dollar.
The American successful alternative to the quick-fix devaluation method had been tax cuts. Even JFK gave them. That puts money in people’s hand quickly but does not favor American products initially so it pulls up the whole world. It creates more money in circulation so it inflates all world currencies that are based on the dollar without the need for all nations to inflate their own currencies. Most nations like the slow underlying inflation that linking their currencies to the dollar automatically produces. The Obama administration could do that quickly now and in such a way as to lift all American’s equally if the tax cut is implemented as checks from the Treasury as was done by the Bush administration last year. The Obama administration could give every adult the same amount so as not to favor more industrious Americans since the purpose is only to pay down individual debt and to stimulate demand for goods.
An old American disastrous alternative is unfortunately the one the Obama administration is pursuing at the moment. It is to create government jobs based on non productive socialist make-work programs. This plan takes two years to start and produces three million jobs which then creates three million voters who depend on the Obama administration for their jobs. They will then elect democrats/socialists because their jobs have no value of their own. They keep their jobs by campaigning and voting as often as possible for the people who give them their jobs. “Ironweed” is a book about the last time a political party turned a recession into a Great Depression using this proposed method. This method will not nip the recession in the bud. It takes two years to start producing jobs and could eventually shackle 25% of the American population in feel good non productive jobs. The FDR Democrats stayed in office for sixteen years without interruption the last time they did it. And they got to blame Herbert Hover the whole time. Now they will of course blame George Bush if they succeed in turning this the Bush recession into an Obama depression.
The right answer seems not to be disasterous job welfare but rater stimulative investment from the Treasury done in whatever form is deemed equitable. That will allow people to make mortgage payments and to reduce the debt load with mild inflation.
Good luck on your investment journey.
European markets were up over 3% yesterday and are presently giving back about 0.75% because they got out way ahead of the American rally.
The futures for American markets are again up fractionally today. The market appears to be bouncing upward again and there is a good possibility that the window for cherry picking out of the market will extend more than a month. Also, although it has not happened in the past two years the cracking of the sell window could prove premature (in as soon as 10 days) if this trend continues. However it is always good to take profits when stocks rise 20% to 40% or more in a short period of time because the probability of holding rapid gains is usually very low. It is a good policy to cherry pick out partially but let some of the investment run upward when fortune smiles.
Yesterday we discussed the culture of poverty, of the negativism and the relishing of a vision of victimization as a rationale for not trying. Poor people are often considered lazy because they often see no value in trying when the cards seem stacked against them. They often seem to want to do things in such a way as though seeking to fail and thus fulfill their negative beliefs. The culture of poverty seldom gets into a leadership role except in third world countries such as 1930’s Eastern Europe under Communism and current equatorial Africa under dictatorships. Generally today in such places the successful farmers and middle class are murdered or driven out and replace by militant partisans who support the state. Each industrious working family that is displaced provides a temporary source of goods and money that the partisans divide up as their reward. Eventually there is no longer any incentive to succeed because the system enslaves the industrious. Poppy plants tend to be a crop of choice. In order to survive without drug trade it is often necessary to invade surrounding countries to enslave them and exploit their wealth. These negative cultures of poverty believe they are justified in exploiting the industrious people who they incorrectly blame for their poverty. Their poverty is the direct result of their negative exploiter-victim belief system.
Our primary problem right now is our culture of debt. We want everything now and to pay later. It increases demand for goods and initially leads to prosperity. From Keynes to today this philosophy has grown in Western nations. In the last eight years it took over the Republican Party which had previously been able to claim to be the party for fiscal responsibility. In this past election we had no candidate at all representing fiscal responsibility. Great Britain has had the longest experience with this problem and if we want to get out of this recession quickly we would do what the British do. They are rapidly devaluing their currency at this moment. By devaluing their currency the real value and cost of British debt is reduced proportionally to the devaluation of the pound. That causes inflation in the prices of imported goods and helps balance their trade while providing jobs at home. Unfortunately it is addictive and encourages debt and is the reason the world no longer is based on the British pound but it is now based on the American Dollar.
The American successful alternative to the quick-fix devaluation method had been tax cuts. Even JFK gave them. That puts money in people’s hand quickly but does not favor American products initially so it pulls up the whole world. It creates more money in circulation so it inflates all world currencies that are based on the dollar without the need for all nations to inflate their own currencies. Most nations like the slow underlying inflation that linking their currencies to the dollar automatically produces. The Obama administration could do that quickly now and in such a way as to lift all American’s equally if the tax cut is implemented as checks from the Treasury as was done by the Bush administration last year. The Obama administration could give every adult the same amount so as not to favor more industrious Americans since the purpose is only to pay down individual debt and to stimulate demand for goods.
An old American disastrous alternative is unfortunately the one the Obama administration is pursuing at the moment. It is to create government jobs based on non productive socialist make-work programs. This plan takes two years to start and produces three million jobs which then creates three million voters who depend on the Obama administration for their jobs. They will then elect democrats/socialists because their jobs have no value of their own. They keep their jobs by campaigning and voting as often as possible for the people who give them their jobs. “Ironweed” is a book about the last time a political party turned a recession into a Great Depression using this proposed method. This method will not nip the recession in the bud. It takes two years to start producing jobs and could eventually shackle 25% of the American population in feel good non productive jobs. The FDR Democrats stayed in office for sixteen years without interruption the last time they did it. And they got to blame Herbert Hover the whole time. Now they will of course blame George Bush if they succeed in turning this the Bush recession into an Obama depression.
The right answer seems not to be disasterous job welfare but rater stimulative investment from the Treasury done in whatever form is deemed equitable. That will allow people to make mortgage payments and to reduce the debt load with mild inflation.
Good luck on your investment journey.
Monday, January 26, 2009
The economic consequences of intellectual poverty
This morning three hours before the markets open the Asian markets closed down just under 1% and the European markets are currently up just over 1%. The futures for American markets are presently up fractionally.
The economic political strategy of the Obama administration continues to be negative as long as they think they can convince Americans that nothing is their fault, and they are just a victim like everyone else. Of course that is the attitude of poor people around the world. It is the culture of poverty and it is a self fulfilling culture that ensures the continuation of poverty.
Prosperity requires that people expect nothing for free and take responsibility for their lives and conditions. Poverty comes as the result of blaming others for our condition and claiming one has been overwhelmed due to the illegal or repressive actions of others such as the rich, Wall Street, and the Bush gang. The culture of poverty doesn’t want to take responsibility for fixing things they want to revel in their misery and punish those they blame for the futility of trying to fix things and the futility of trying to succeed. They want to revel in the delusions that their minds are being wasted and it is not what you know or do that counts but who you know and what they can do for you that count. Poverty is the culture that breeds corruption not of the white collar intellectual type but of the heavy handed type like in the book, “Ironweed” where it is your duty to vote at least six times in different Albany precincts and register Democrat if you want your garbage picked up. Depression is a state of mind, a state of an impoverished mind.
And Americans have had such hope for this new president and thought he would bring us hope as FDR did in hard times. But perhaps it was because FDR was filthy rich and filthy poor just doesn’t bring the same hope, ambition, respect and love for all people, and a sense of duty and pride. Instead it appoints a $16,000 federal tax cheat, an employer of an illegal foreign worker, and an architect of the collapse of our financial system to become the American Secretary of the Treasury. Yes, the panic that forced the government to insure our money market investments was the result of letting one financial institution fail completely and investors lose everything they had. Investors who already had been raped by corporate greed were then wiped out by government. Doesn’t that make you feel confident the new Treasury Secretary will do what is best for you? No?
President Obama has set the stage this first month for the economy and Wall Street. The first week of January was down, and so far we are down about 7% for the month. Where was the Obama rally? Unless the rally comes this week statistics say the stage will be set for a bad year.
Well it is obvious that this new administration will do what it can to spread their victim culture of irresponsibility and self loathing.
How far will they take us in self loathing? Perhaps they will threaten to turn President Bush over to the European court at Hague for a trial as a war criminal? You think that is not possible?
You may think that our position is less than bullish. But you see the market began to collapse last year the moment the Obama campaign and their fawning media boosters began saying we were in a great depression. And then when he was elected it plummeted on Election Day ad hit its low. So far the Obama election low point has held with some margin and we called it the market bottom. It was a capitulation point.
But we are not in a depression... this is a recession. The banks and real estate markets failed in the 1990’s during that recession too. Unless the Obama administration actually succeeds and gives us a great depression, the economy and the markets have discounted the very worst already. We think the poverty culture that is in power has already been discounted and everyone is so negative now that it has created an investment opportunity of a lifetime. Real estate should also be an investment opportunity by mid year and unless this administration does something radically bad, this recession should be declared over before the end of the year.
Good luck on your investment journey.
The economic political strategy of the Obama administration continues to be negative as long as they think they can convince Americans that nothing is their fault, and they are just a victim like everyone else. Of course that is the attitude of poor people around the world. It is the culture of poverty and it is a self fulfilling culture that ensures the continuation of poverty.
Prosperity requires that people expect nothing for free and take responsibility for their lives and conditions. Poverty comes as the result of blaming others for our condition and claiming one has been overwhelmed due to the illegal or repressive actions of others such as the rich, Wall Street, and the Bush gang. The culture of poverty doesn’t want to take responsibility for fixing things they want to revel in their misery and punish those they blame for the futility of trying to fix things and the futility of trying to succeed. They want to revel in the delusions that their minds are being wasted and it is not what you know or do that counts but who you know and what they can do for you that count. Poverty is the culture that breeds corruption not of the white collar intellectual type but of the heavy handed type like in the book, “Ironweed” where it is your duty to vote at least six times in different Albany precincts and register Democrat if you want your garbage picked up. Depression is a state of mind, a state of an impoverished mind.
And Americans have had such hope for this new president and thought he would bring us hope as FDR did in hard times. But perhaps it was because FDR was filthy rich and filthy poor just doesn’t bring the same hope, ambition, respect and love for all people, and a sense of duty and pride. Instead it appoints a $16,000 federal tax cheat, an employer of an illegal foreign worker, and an architect of the collapse of our financial system to become the American Secretary of the Treasury. Yes, the panic that forced the government to insure our money market investments was the result of letting one financial institution fail completely and investors lose everything they had. Investors who already had been raped by corporate greed were then wiped out by government. Doesn’t that make you feel confident the new Treasury Secretary will do what is best for you? No?
President Obama has set the stage this first month for the economy and Wall Street. The first week of January was down, and so far we are down about 7% for the month. Where was the Obama rally? Unless the rally comes this week statistics say the stage will be set for a bad year.
Well it is obvious that this new administration will do what it can to spread their victim culture of irresponsibility and self loathing.
How far will they take us in self loathing? Perhaps they will threaten to turn President Bush over to the European court at Hague for a trial as a war criminal? You think that is not possible?
You may think that our position is less than bullish. But you see the market began to collapse last year the moment the Obama campaign and their fawning media boosters began saying we were in a great depression. And then when he was elected it plummeted on Election Day ad hit its low. So far the Obama election low point has held with some margin and we called it the market bottom. It was a capitulation point.
But we are not in a depression... this is a recession. The banks and real estate markets failed in the 1990’s during that recession too. Unless the Obama administration actually succeeds and gives us a great depression, the economy and the markets have discounted the very worst already. We think the poverty culture that is in power has already been discounted and everyone is so negative now that it has created an investment opportunity of a lifetime. Real estate should also be an investment opportunity by mid year and unless this administration does something radically bad, this recession should be declared over before the end of the year.
Good luck on your investment journey.
Friday, January 23, 2009
Market bounces... or is it dribbling
Throughout the 1990’s corporation stock rose each time a layoff was announced because it meant productivity would improve both at the company cutting back and from the better deployment of the persons being let go. It ended years of little productivity improvement and made the 1990s the decade of rapid American productivity growth. Microsoft has been bloated for ten years which corresponds directly to their creation of bloated software. Their releases require major update packages to make them run right. They do not support their earlier packages that are still needed in the field and thus Microsoft consciously decided to leave those customers vulnerable to hacker attack. They should have had five 5% layoffs in the last ten years but yesterday they announced their very first layoff. The news media played that great news up as if it were bad news when it is the best news from Microsoft in ten years.
The media continues to broadcast the empty headed views of all the critics of the Obama stimulation package. The money Obama spends on infrastructure will work just as Eisenhower’s highway and bridge program worked, Regan’s energy supply side expansion and tax cuts worked, and Clintons trade expansion worked. The media does mot have to broadcast just the fears of ignorant talking heads… it could interview some of the administration economists and be more helpful and hopeful.
The market bounced again yesterday from slightly better positions than it hit on Obama’s inauguration day. That bounce is great news but investors are getting a little weary of the repetitions.
Today Asian markets are down about 1% with India down 1.6%. Japan is down 3.8% due to SONY losses.
European markets are currently down about 2% on recession news from Great Britain which is only down about 1.5%.
While the time to sell out of the market before the window of opportunity closes is currently about a month away, the market must begin advancing again in a few days if it is to push back that day of reckoning. The markets seem to be dribbling rather than bouncing. We would recommend buying on each bounce but not on dribbles.
Good luck on your investment journey.
The media continues to broadcast the empty headed views of all the critics of the Obama stimulation package. The money Obama spends on infrastructure will work just as Eisenhower’s highway and bridge program worked, Regan’s energy supply side expansion and tax cuts worked, and Clintons trade expansion worked. The media does mot have to broadcast just the fears of ignorant talking heads… it could interview some of the administration economists and be more helpful and hopeful.
The market bounced again yesterday from slightly better positions than it hit on Obama’s inauguration day. That bounce is great news but investors are getting a little weary of the repetitions.
Today Asian markets are down about 1% with India down 1.6%. Japan is down 3.8% due to SONY losses.
European markets are currently down about 2% on recession news from Great Britain which is only down about 1.5%.
While the time to sell out of the market before the window of opportunity closes is currently about a month away, the market must begin advancing again in a few days if it is to push back that day of reckoning. The markets seem to be dribbling rather than bouncing. We would recommend buying on each bounce but not on dribbles.
Good luck on your investment journey.
Thursday, January 22, 2009
The new positive spin is what we anticipated
The Obama rally turned into a dead cat thud on inauguration day. It drove us to the December resistance level from which the market bounced yesterday.
And did you notice something new yesterday? Did you notice that the media started emphasizing good financial news? They mentioned a few corporations that reported profits last quarter when even a week ago they were trying to say no one was buying anything and sales were way down when in fact sales were down only 0.1% for all of 2008.
Remember they said 2.7 million Americans unemployed was the worst level since 1946 which is about as dumb as a fence post and about as relevant. American unemployment today it is only 7.3% while in 1946 the 2.7 million were well over 15% the work force. The media and the Obama people spun everything negative to make Bush look bad and set Obama up to be the messiah.
But now they are starting the positive spin we predicted so President Obama can get credit for avoiding a depression that he and the media were in fact causing by disparaging America’s financial and social support structures.
Well the new positive spin is what we anticipated would cause the stock market to begin to surge as the fear of a depression abated. The sell window cracked open on January 20 and currently the crack is 26 days long. But six days like yesterday could open that selling window up for four months or more. Remember our first sell window was open from June 20, 2007 to Nov 2, 2007.
Some of the high dividend stocks we bought have been up 20% to 50% already but most stocks are back to December lows. Now you know how well you could have done and we expect this next rally to be the big one so you know from the last month, the potential profits you could take over the coming months.
You might think, "why not buy now since we are near the December low?" No one can argue with that and that is exactly why we will get a bounce now. As depression fears abate and President Obama gets the credit as the new American hope you can sell or sell the political hype short and profit from the change from negativity to irrational exuberance.
We believe the window of opportunity for selling will open well beyond a month and we will try to cherry pick out of the market. For instance the oil tankers, the dry ships, may not exceed their previous 40-50% gains because they were mostly profitable with high oil prices. But the resources such as copper and cement will be in demand for China’s and later America’s infrastructure work. The Asian ETFs (non Japan), the big machinery and the telecommunications stocks could recover most of their 2008 losses.
Your 401 may recover significantly as well. Then we will give the countdown for the sell window closing. It is best to cherry pick because stocks peak at their own times depending on their own news. We will also get our 401 out of stocks at that time.
Again, six bull market days or more could push the closing of the selling opportunity out much further in time. We hope that will be the case and if the media continues a positive spin that should happen.
We think the housing problem will bottom out in about 5 months based on a normal economic recovery caused by the FED’s low interest rates. We expect most of the new economic stimulus will come too late and may result in an inflation bubble.
We expect to continue to average one or two major buying and selling opportunities a year or one every three to six months.
Last night Asian markets were up and average of 1% and Europe was also up about 1% but seems to be slipping, anticipating a down day on Wall Street. Wall Street may begin lower but is already lower than it was before the inauguration so we expect it could hold its own today. After all, the media seems to be continuing the bullish spin it started yesterday.
Good luck on your investment journey
And did you notice something new yesterday? Did you notice that the media started emphasizing good financial news? They mentioned a few corporations that reported profits last quarter when even a week ago they were trying to say no one was buying anything and sales were way down when in fact sales were down only 0.1% for all of 2008.
Remember they said 2.7 million Americans unemployed was the worst level since 1946 which is about as dumb as a fence post and about as relevant. American unemployment today it is only 7.3% while in 1946 the 2.7 million were well over 15% the work force. The media and the Obama people spun everything negative to make Bush look bad and set Obama up to be the messiah.
But now they are starting the positive spin we predicted so President Obama can get credit for avoiding a depression that he and the media were in fact causing by disparaging America’s financial and social support structures.
Well the new positive spin is what we anticipated would cause the stock market to begin to surge as the fear of a depression abated. The sell window cracked open on January 20 and currently the crack is 26 days long. But six days like yesterday could open that selling window up for four months or more. Remember our first sell window was open from June 20, 2007 to Nov 2, 2007.
Some of the high dividend stocks we bought have been up 20% to 50% already but most stocks are back to December lows. Now you know how well you could have done and we expect this next rally to be the big one so you know from the last month, the potential profits you could take over the coming months.
You might think, "why not buy now since we are near the December low?" No one can argue with that and that is exactly why we will get a bounce now. As depression fears abate and President Obama gets the credit as the new American hope you can sell or sell the political hype short and profit from the change from negativity to irrational exuberance.
We believe the window of opportunity for selling will open well beyond a month and we will try to cherry pick out of the market. For instance the oil tankers, the dry ships, may not exceed their previous 40-50% gains because they were mostly profitable with high oil prices. But the resources such as copper and cement will be in demand for China’s and later America’s infrastructure work. The Asian ETFs (non Japan), the big machinery and the telecommunications stocks could recover most of their 2008 losses.
Your 401 may recover significantly as well. Then we will give the countdown for the sell window closing. It is best to cherry pick because stocks peak at their own times depending on their own news. We will also get our 401 out of stocks at that time.
Again, six bull market days or more could push the closing of the selling opportunity out much further in time. We hope that will be the case and if the media continues a positive spin that should happen.
We think the housing problem will bottom out in about 5 months based on a normal economic recovery caused by the FED’s low interest rates. We expect most of the new economic stimulus will come too late and may result in an inflation bubble.
We expect to continue to average one or two major buying and selling opportunities a year or one every three to six months.
Last night Asian markets were up and average of 1% and Europe was also up about 1% but seems to be slipping, anticipating a down day on Wall Street. Wall Street may begin lower but is already lower than it was before the inauguration so we expect it could hold its own today. After all, the media seems to be continuing the bullish spin it started yesterday.
Good luck on your investment journey
Wednesday, January 21, 2009
America, the land of lowered expectations
Wall Street sent President Obama another message.
"Stop using the word depression or investors will have one."
"Stop setting our nation’s expectations so low."
The message was not as severe as the message Wall Street sent Obama last November. But apparently the Obama media blamed that message on the previous administration so Wall Street sent him another message yesterday.
The Obama people still do not know that depressions are psychological in both people and in economies. Depressions are the result of feelings of hopelessness and loss of control over one’s destiny. The Obama media and staff must have never read about FDR and how things only got worse with his socialist measures but FDR came through in the end with his messages of hope. The Obama people would rather set expectations low, but good expectations are what give people hope. So in effect low expectations destroy our capacity to succeed.
Wall Street said "no" yesterday to the new concept of “America the world victimizer nation consisting of a victimized population run by a victimized federal administration.
The American markets gave the Obama administration a dismal -4% no vote for the healing nation of victim’s speeches and clearly etched lack of hope or direction.
Most of Asian markets gave them a -2% no vote last night with China down only 0.46%.
Most of Europe seems headed for a -2% no vote today based on early trading.
Ok, we are very close to the December resistance levels and could bounce any time now. We still would have a ways to fall before we hit the “Obama sell-off” level of last November. At present we should have about 27 business days to cherry pick back out of the market during the bounce. You will recall we recommended only investments in very high dividend stocks and emerging markets, and in particular those ETFs with investments in China; nothing speculative. Financials could go to zero even as the economy turn’s around because stock holders are being stripped of equity and banks are becoming worth more dead than alive.
Market...Yesterday.... November’s Bottom ..December’s Bottom
DJI .........7949 ..............7392.............................8072
NASDQ....1441 ..............1295.............................1398
S&P..........805 ................741...............................815.7
Good luck on your investment journey
"Stop using the word depression or investors will have one."
"Stop setting our nation’s expectations so low."
The message was not as severe as the message Wall Street sent Obama last November. But apparently the Obama media blamed that message on the previous administration so Wall Street sent him another message yesterday.
The Obama people still do not know that depressions are psychological in both people and in economies. Depressions are the result of feelings of hopelessness and loss of control over one’s destiny. The Obama media and staff must have never read about FDR and how things only got worse with his socialist measures but FDR came through in the end with his messages of hope. The Obama people would rather set expectations low, but good expectations are what give people hope. So in effect low expectations destroy our capacity to succeed.
Wall Street said "no" yesterday to the new concept of “America the world victimizer nation consisting of a victimized population run by a victimized federal administration.
The American markets gave the Obama administration a dismal -4% no vote for the healing nation of victim’s speeches and clearly etched lack of hope or direction.
Most of Asian markets gave them a -2% no vote last night with China down only 0.46%.
Most of Europe seems headed for a -2% no vote today based on early trading.
Ok, we are very close to the December resistance levels and could bounce any time now. We still would have a ways to fall before we hit the “Obama sell-off” level of last November. At present we should have about 27 business days to cherry pick back out of the market during the bounce. You will recall we recommended only investments in very high dividend stocks and emerging markets, and in particular those ETFs with investments in China; nothing speculative. Financials could go to zero even as the economy turn’s around because stock holders are being stripped of equity and banks are becoming worth more dead than alive.
Market...Yesterday.... November’s Bottom ..December’s Bottom
DJI .........7949 ..............7392.............................8072
NASDQ....1441 ..............1295.............................1398
S&P..........805 ................741...............................815.7
Good luck on your investment journey
Friday, January 16, 2009
Economic spin just changed from negative to positive
Buyers came in on high volume yesterday and the cash flow was more positive into the stock market. Last night the Asian markets rose 2% on average and this morning the European markets are up 2.8% in early trading. American market futures are up 1.9 % two hours before the American markets even open. The media will say today it is caused by the bail out of Bank America but we know the real reason is that the money that has given us our "New Regime" is getting ready for the inauguration and their economic spin has just flipped from negative to positive. The honeymoon is just beginning now.
The buying pressure is building fast now. There are just too many bargains and the short analysts and the pro-Obama media did their best to continue to create the illusion of the "Great Depression." Their negativism did achieve their main goal of a regime change here in the USA. But that was their prime objective anyway.
At some point in the distant future Soros and others will become disenchanted and will begin betting against the "New Regime" if not because they feel betrayed, at least because their greed will see the opportunity to short the American dollar. Then all hell will break lose as greed and corruption become front-page news. We have said from the beginning that ignoring "moral hazards" and rewarding greed have been the cornerstones of the economic bubbles and financial disasters we have seen. Some people will have to go to prison to set examples before this is over. Otherwise it will only get even worse and lead to violence. But that we hope will be avoided since the "New Regime" will have an opportunity to fight corruption and greed as long as the new president remains popular.
Good luck on your investment journey
The buying pressure is building fast now. There are just too many bargains and the short analysts and the pro-Obama media did their best to continue to create the illusion of the "Great Depression." Their negativism did achieve their main goal of a regime change here in the USA. But that was their prime objective anyway.
At some point in the distant future Soros and others will become disenchanted and will begin betting against the "New Regime" if not because they feel betrayed, at least because their greed will see the opportunity to short the American dollar. Then all hell will break lose as greed and corruption become front-page news. We have said from the beginning that ignoring "moral hazards" and rewarding greed have been the cornerstones of the economic bubbles and financial disasters we have seen. Some people will have to go to prison to set examples before this is over. Otherwise it will only get even worse and lead to violence. But that we hope will be avoided since the "New Regime" will have an opportunity to fight corruption and greed as long as the new president remains popular.
Good luck on your investment journey
Thursday, January 15, 2009
World markets trembled for Bill yesterday
The major European markets were down close to 5% yesterday and are now down fractionally.The Asian markets on average closed down 3.5% last night but China was down less than 0.5%.The American markets were down about 3.5% yesterday.
It is not really credible to believe that the retail sales numbers were the cause of the 3.5% decline as the media was saying. After all the sales for the entire year of 2008 sales were down only 0.1% relative to 2007 so the media hype about sales couldn't be the real concern. It more likely that the decline is due to the continued bank losses such as Bank of America now wanting American taxpayers to give another small bailout to cover their Merrill Lynch takeover losses. Financials took a big hit. When will bailouts end?
But another reason for the stock market loss is that the world realizes it will soon lose a genius at inventing and marketing new technologies. Bill Gates now has a short time to live and has gone home. Apple shares are plummeting and world markets trembled for Bill yesterday. People remember that when Bill left Apple the first time the company foundered until he returned. As for market cash flow fundamentals, some money has flowed out of stocks for the last few days but there is no sell signal in sight.
As for our re-spiral analysis there is no sell window open yet and the earliest we project a possibility of a sell window opening is early next week presuming we have more days like yesterday. If such a sell window opens we compute that it would be open a minimum of four weeks.
We still believe the market capitulation was last November and the new administration will enjoy 100 days of honeymoon. Many national trails and stimulus packages will be approved in the first two weeks of the new president’s term.
It is not really credible to believe that the retail sales numbers were the cause of the 3.5% decline as the media was saying. After all the sales for the entire year of 2008 sales were down only 0.1% relative to 2007 so the media hype about sales couldn't be the real concern. It more likely that the decline is due to the continued bank losses such as Bank of America now wanting American taxpayers to give another small bailout to cover their Merrill Lynch takeover losses. Financials took a big hit. When will bailouts end?
But another reason for the stock market loss is that the world realizes it will soon lose a genius at inventing and marketing new technologies. Bill Gates now has a short time to live and has gone home. Apple shares are plummeting and world markets trembled for Bill yesterday. People remember that when Bill left Apple the first time the company foundered until he returned. As for market cash flow fundamentals, some money has flowed out of stocks for the last few days but there is no sell signal in sight.
As for our re-spiral analysis there is no sell window open yet and the earliest we project a possibility of a sell window opening is early next week presuming we have more days like yesterday. If such a sell window opens we compute that it would be open a minimum of four weeks.
We still believe the market capitulation was last November and the new administration will enjoy 100 days of honeymoon. Many national trails and stimulus packages will be approved in the first two weeks of the new president’s term.
Our market positions are based on the following scenario.
- The new President Barack Obama will be given a "wonder boy" honeymoon where most critics give him a chance and the world media fawns over him.
- Market psychology improves dramatically.
- The left wing assumed demise of capitalism that caused this incredible buying opportunity will turn out to be untrue.
- The right wing accusations that the new administration is socialist will also prove untrue.
- The stimulation packages will work, another economic bubble will begin, and the rapidly growing FBI will try to take down fraud before it does so much economic damage.
- President Obama will turn out to be an American pragmatist and a great president, at least initially.
Wednesday, January 14, 2009
Pessimism spin prevails as Funds shift to a long position and need more sellers.
Again retail sales are reported in a way to spin a negative psychology of the markets.
"The U.S. Commerce Department said total retail sales fell 2.7 percent to a seasonally adjusted $343.2 billion last month following a revised 2.1 percent drop in November.
December's drop was the biggest since October last year when sales fell 3.4 percent."
Remember sales did indeed drop 3.4% in October.2008 relative to October 2007. In fact sales fell off a cliff back in August 2008. Well if we remained off that cliff we would have 3.1%, 3.4%, 4%, 4.5%… down more every month since August 2008 because the decline is a year to year measure… and sales were increasing every month in 2007 and 2008 (on a year to year basis) until August 2008. So a real fixed % drop in sales would yield a bigger decline each month not because it was decreasing in 2008 but because the sales base that is used was increasing each month in 2007.
Also they say "revised November 2008 sales" and leave out the fact that the original November sales decline estimate was pessimistic just as the December decline estimate is probably too pessimistic.
Still the stock markets are resisting pressure. China will lead the recovery and they were up 3.5% last night. Europe will lag the recovery and they are down an average of about 3% at the moment.
Next week the rally could be spectacular. But the moment it surges we may have selling opportunities to catch the overshoot that will occur.
"The U.S. Commerce Department said total retail sales fell 2.7 percent to a seasonally adjusted $343.2 billion last month following a revised 2.1 percent drop in November.
December's drop was the biggest since October last year when sales fell 3.4 percent."
Remember sales did indeed drop 3.4% in October.2008 relative to October 2007. In fact sales fell off a cliff back in August 2008. Well if we remained off that cliff we would have 3.1%, 3.4%, 4%, 4.5%… down more every month since August 2008 because the decline is a year to year measure… and sales were increasing every month in 2007 and 2008 (on a year to year basis) until August 2008. So a real fixed % drop in sales would yield a bigger decline each month not because it was decreasing in 2008 but because the sales base that is used was increasing each month in 2007.
Also they say "revised November 2008 sales" and leave out the fact that the original November sales decline estimate was pessimistic just as the December decline estimate is probably too pessimistic.
Still the stock markets are resisting pressure. China will lead the recovery and they were up 3.5% last night. Europe will lag the recovery and they are down an average of about 3% at the moment.
Next week the rally could be spectacular. But the moment it surges we may have selling opportunities to catch the overshoot that will occur.
Tuesday, January 13, 2009
Downside resistance levels being hit before the Obama rally
Volume is drying up on market declines and each time it grows the market has recently gone up. All the the large equities markets are indicating that they have bottomed. Prices can now go up enormously on just a small increase in volume such that the Obama rally will likely catapult the markets higher without much time for investors to adjust. In a little more than a week we anticipate that more than half of our expected 40% rally from the December lows will be over. That 40% rally is what is needed to only reach the lower limit of a normal bear market. The market has much higher potential.
The adverse effects of the current recession are exaggerated by a press that thinks they can build up the new president by tearing down the old one. Yes, today the 2.6 million unemployed Americans exceeds even the unemployment when Rome fell to the barbarians but then it was 100% Roman unemployment and in America it is only 7.3% unemployment where 6% is still considered normal. The exaggeration of the negative only has another week to run before the media begins exaggerating the positive for the new administration.
Asian and European markets are down again on a weighted basis of about 2.2% for both. Japan however is down 4.8% after Sony lost over $1Billion.
The best entry points now are likely the last hour of the day and put the limit orders in at least 1% below the price going into the last hour.
Mad money is beginning to recognize stock bottoms. If Jim Cramer opens his eyes he will see that the major markets look just like the bottoming stocks. The death of American Capitalism has been grossly exaggerated and has served well the 2008 campaign objective of unseating the Republicans. It is unlikely that the new Democrat president will be a socialist so the fears that lead to the 20% decline after the election will likely prove unfounded.
The adverse effects of the current recession are exaggerated by a press that thinks they can build up the new president by tearing down the old one. Yes, today the 2.6 million unemployed Americans exceeds even the unemployment when Rome fell to the barbarians but then it was 100% Roman unemployment and in America it is only 7.3% unemployment where 6% is still considered normal. The exaggeration of the negative only has another week to run before the media begins exaggerating the positive for the new administration.
Asian and European markets are down again on a weighted basis of about 2.2% for both. Japan however is down 4.8% after Sony lost over $1Billion.
The best entry points now are likely the last hour of the day and put the limit orders in at least 1% below the price going into the last hour.
Mad money is beginning to recognize stock bottoms. If Jim Cramer opens his eyes he will see that the major markets look just like the bottoming stocks. The death of American Capitalism has been grossly exaggerated and has served well the 2008 campaign objective of unseating the Republicans. It is unlikely that the new Democrat president will be a socialist so the fears that lead to the 20% decline after the election will likely prove unfounded.
Monday, January 12, 2009
Buy at the end of declining days and ask for a lower price.
The underlying rally remains intact but the hedge funds are doing an outstanding job covering shorts without stimulating too much small investor interest. One thing is certain, listening to CNBC or the political economic analysis is almost as good as listening to Bernie Madoff. You cannot just accept information without removing their spin first. You need to determine the truth hidden behind remarks such as the unemployment problem. You have to put in the right context. For example if they say unemployment is 500 time worse than during the American revolution the context is they are comparing it improperly because the nations population is much larger now. You have to look at the 7.3% actual unemployment now versus the estimates of 25% unemployment and 22% inflation rate towards the end of the American Revolution. Twenty years ago 7.3% American unemployment was not unusual. The maximum double digit rate they are projecting for this recession is less than Socialist states have during their best times.
Asian and European markets are down on a weighted basis of about 2.2% and 1.1% respectively at this time.
The best entry points now are likely the last hour and put the limit orders in at least 1% below the price going into the last hour.
The negative news tonight will be that the first week was down and that will correlate with eventually a down year. That happens often. But an up year following a down year of more than 15% is far more probable.
The market is waiting for Obama to take office and then the spin of the media and analysts will swing from negative to adulation probably for the next six months at least. If the market has gained under the negative spin we have seen, the market will probably overshoot upward and we may be partly or completely out again if it does overshoot in the next six months.
15% of the 40% gain we expected has already occurred since the November 2008 lows. That leaves anything over an additional 25% gain within six months as in overshoot territory and an opportunity to go into cash again.
Asian and European markets are down on a weighted basis of about 2.2% and 1.1% respectively at this time.
The best entry points now are likely the last hour and put the limit orders in at least 1% below the price going into the last hour.
The negative news tonight will be that the first week was down and that will correlate with eventually a down year. That happens often. But an up year following a down year of more than 15% is far more probable.
The market is waiting for Obama to take office and then the spin of the media and analysts will swing from negative to adulation probably for the next six months at least. If the market has gained under the negative spin we have seen, the market will probably overshoot upward and we may be partly or completely out again if it does overshoot in the next six months.
15% of the 40% gain we expected has already occurred since the November 2008 lows. That leaves anything over an additional 25% gain within six months as in overshoot territory and an opportunity to go into cash again.
Friday, January 9, 2009
We think the new stimulation package will accomplish much more
Yesterday the market passed a test and the rally was challenged but survived again. We were concerned we could get a premature sell signal.
Unfortunately the media continues with negativity. As we pointed out, statistics lie when they are misused and today the media is continuing to misuse it. For instance they expect the job losses in December will bring the total in 2008 up to 2.6 million jobs lost for American workers. Then they lie and say that is the same as in 1946 when WWII ended and production of military weapons ceased. Again they are lying because they do not say that we had less than half the work force in 1946. They could just as easily say we now have ten times the unemployment that France has today discounting the fact France has far fewer workers who work 15% fewer hours a week and start work with five times the average American worker’s vacation time. France in truth has more than twice the unemployment problem that America has at this time when we correctly base the statistics on per capita employees and hours worked per year.
President elect Obama seems to like the exaggeration of bad news too. That is a very dangerous situation unless the negativity stops in 12 days when Obama takes office. Fear mongering could end the American economic recovery and cut the stock market rally short. Americans do not like to have their intelligence insulted and if fear mongering continues Obama’s administration’s popularity will fall faster than Bush’s did and Obama could become as unpopular as the last Congress.
Asia was down fractionally last night.
Europe and American stock market futures are down ever so slightly now.
Today we are at a psychological pivot point. Could it be that the fear mongering was only done to lower expectations for today so that the media could tell the truth after the announcement and say we are much better off than in 1946 when we had widespread unemployment and all the troops came home looking for jobs?
Could it be that fear mongering will end completely in 12 days so that the world economies will recover as expected this year?
Or will fear mongering continue to be used as an excuse to turn our economy into a socialist system where people pretend to work, the government pretends to pay them, and everyone pretends they are better off as in Zimbabwe where inflation is out of control?
We believe fear mongering will end in 12 days and unlike last November’s Election Day when the stock market plummeted, we believe the markets will renew and strengthen the current rally. We are counting on the new President Obama to have one of the best and most hope filled inauguration speeches ever delivered. We expect to see the nasty bickering in government to end, and for the new American Congress to start doing meaningful work, and for the new Majority Whip in the House (John B. Larson, CT) to create a whole new positive atmosphere.
We think the new stimulation package will accomplish much more than the $700 billion President Bush sent down the Wall Street financial rat hole because it will actually put real cash in circulation and fix our infrastructure as we have done often in the past and as China is doing today. Recessions are an opportunity for nations to work on infrastructure. President Eisenhower did it after WWII by rebuilding bridges and national highways. The new administration promises to rebuild mass transit, expand alternative cleaner energy sources, and expand communication infrastructure to improve American productivity and reduce waste.
That is why we maintain that the market has already bottomed and anticipates the economy will begin to recover this year. That is why we believe that the world markets will at some point this year be 35% to 50% higher than their November 2008 lows (some are already up about 20%). That should recover about half the losses many investors experienced I 2008 and the velocity of money should return to normal ending the credit crunch.
Good luck with your investment journey.
Unfortunately the media continues with negativity. As we pointed out, statistics lie when they are misused and today the media is continuing to misuse it. For instance they expect the job losses in December will bring the total in 2008 up to 2.6 million jobs lost for American workers. Then they lie and say that is the same as in 1946 when WWII ended and production of military weapons ceased. Again they are lying because they do not say that we had less than half the work force in 1946. They could just as easily say we now have ten times the unemployment that France has today discounting the fact France has far fewer workers who work 15% fewer hours a week and start work with five times the average American worker’s vacation time. France in truth has more than twice the unemployment problem that America has at this time when we correctly base the statistics on per capita employees and hours worked per year.
President elect Obama seems to like the exaggeration of bad news too. That is a very dangerous situation unless the negativity stops in 12 days when Obama takes office. Fear mongering could end the American economic recovery and cut the stock market rally short. Americans do not like to have their intelligence insulted and if fear mongering continues Obama’s administration’s popularity will fall faster than Bush’s did and Obama could become as unpopular as the last Congress.
Asia was down fractionally last night.
Europe and American stock market futures are down ever so slightly now.
Today we are at a psychological pivot point. Could it be that the fear mongering was only done to lower expectations for today so that the media could tell the truth after the announcement and say we are much better off than in 1946 when we had widespread unemployment and all the troops came home looking for jobs?
Could it be that fear mongering will end completely in 12 days so that the world economies will recover as expected this year?
Or will fear mongering continue to be used as an excuse to turn our economy into a socialist system where people pretend to work, the government pretends to pay them, and everyone pretends they are better off as in Zimbabwe where inflation is out of control?
We believe fear mongering will end in 12 days and unlike last November’s Election Day when the stock market plummeted, we believe the markets will renew and strengthen the current rally. We are counting on the new President Obama to have one of the best and most hope filled inauguration speeches ever delivered. We expect to see the nasty bickering in government to end, and for the new American Congress to start doing meaningful work, and for the new Majority Whip in the House (John B. Larson, CT) to create a whole new positive atmosphere.
We think the new stimulation package will accomplish much more than the $700 billion President Bush sent down the Wall Street financial rat hole because it will actually put real cash in circulation and fix our infrastructure as we have done often in the past and as China is doing today. Recessions are an opportunity for nations to work on infrastructure. President Eisenhower did it after WWII by rebuilding bridges and national highways. The new administration promises to rebuild mass transit, expand alternative cleaner energy sources, and expand communication infrastructure to improve American productivity and reduce waste.
That is why we maintain that the market has already bottomed and anticipates the economy will begin to recover this year. That is why we believe that the world markets will at some point this year be 35% to 50% higher than their November 2008 lows (some are already up about 20%). That should recover about half the losses many investors experienced I 2008 and the velocity of money should return to normal ending the credit crunch.
Good luck with your investment journey.
Thursday, January 8, 2009
Obama Warns of Irreversible U.S. Economic Slump Without Government Action
Futures are indicating a lower open for American markets as traders wait to get initial jobless claims data from the Labor Department. Global markets sold off. Asian Markets declined about 3+% on average while European markets are down again about 1+% this morning. The media reported yesterday that layoffs in December were four times as high as a year ago. Friday will be the day for official unemployment numbers. This week will set the tone for the month that will set the tone for the new administration.
Yesterday's losses wiped out most of the previous three days' gains. But the volume was lower than on the preceding two days saying buyers went to the sidelines perhaps in hope of buying at a lower price. But we should be a little concerned with the amount of the price drop for such low selling pressure. If it took people by surprise that would be fine because those people will come in again this week. But what if the stock market does not like President Obama and we start a sharp decline as happened the day he won the election? Will the media let that happen? Can all the media's adulation of him even make a difference? President elect Obama made a speech about how bad the economy is and he looked sweaty like the weight of the world was on his shoulders. Can he handle the presidency? Does he know that creating fear and distrust is what destroys national economies?
We are currently at 7.3% unemployment with 10% unemployment projected for 2010… six months after the economy is recovering. That compares with American unemployment at 25% to 30% and European unemployment over 50% in the 1930s. We have not had 9% unemployment since 1997. The media is still tying to make it look bad now and one trick they use is to quote unemployment in populdation rather than percentages. Then because today America employs almost as many women as men and because our population grew they can claim we have as many people unemployed now as during the depression. The media knows how to lie using statistics and so they could easily damage confidence again and hurt the markets. But it could backfire at this point. It could make this week look terrible and the fear could spread and another panic could occur when Obama is sworn in as president. In that case the month could end at the recent lows and that would be a very bad indication of how the economy will be under the new administration.
So you see the media is playing with fire if they continue to spread depression fear to help Obama at the expense of Bush. The only thing we have to fear is fear itself and we hope the media and Obama know that by now. Therefore we can expect the media to continue to slow down their negativism and switch to optimism as we approach inauguration day.
Doug Kass who recently spewed extreme negativism switched sides yesterday. He now says the sentiment in stocks is so low that it is dangerous to sell stocks short and the optimism with bonds is so high now that people should move from bonds to stocks. That would be good for stocks but interest rates would rise in order for the Treasury to be able to fund deficit spending and the stimulation package. Right now the stimulation package seems like a good idea but it could cause a new unsustainable bubble and it could eventually backfire by raising the cost of debt. If for instance the bubble causes a swelling of state and federal employees and they lay off military personnel and close military bases as President Clinton did, then the government entitlements would cause greater accelerating deficits and we would be at a much greater risk of terrorism. American military weakness, the appearance of military retreat/defeat, and spreading mid-east poverty due to low oil prices could put terrorists on the offensive. Any corruption and failure in the new administration will engender the use of the race card and we could be back to 1960's riots and bombings. With the media so closely tied to the Administration both could go down the drain together.
So as investors we need to know the risks, the rewards, the exit strategy, and the trigger points for timing exit decisions. It is never easy and if we think it is we probably are already broke and deluding ourselves. Another concern we should have is that media negativism right now could abort the current rally and set in motion an earlier end to the new administration's honeymoon with the markets. We are watching that closely and we are halting further purchases except for special situations.
Yesterday's losses wiped out most of the previous three days' gains. But the volume was lower than on the preceding two days saying buyers went to the sidelines perhaps in hope of buying at a lower price. But we should be a little concerned with the amount of the price drop for such low selling pressure. If it took people by surprise that would be fine because those people will come in again this week. But what if the stock market does not like President Obama and we start a sharp decline as happened the day he won the election? Will the media let that happen? Can all the media's adulation of him even make a difference? President elect Obama made a speech about how bad the economy is and he looked sweaty like the weight of the world was on his shoulders. Can he handle the presidency? Does he know that creating fear and distrust is what destroys national economies?
We are currently at 7.3% unemployment with 10% unemployment projected for 2010… six months after the economy is recovering. That compares with American unemployment at 25% to 30% and European unemployment over 50% in the 1930s. We have not had 9% unemployment since 1997. The media is still tying to make it look bad now and one trick they use is to quote unemployment in populdation rather than percentages. Then because today America employs almost as many women as men and because our population grew they can claim we have as many people unemployed now as during the depression. The media knows how to lie using statistics and so they could easily damage confidence again and hurt the markets. But it could backfire at this point. It could make this week look terrible and the fear could spread and another panic could occur when Obama is sworn in as president. In that case the month could end at the recent lows and that would be a very bad indication of how the economy will be under the new administration.
So you see the media is playing with fire if they continue to spread depression fear to help Obama at the expense of Bush. The only thing we have to fear is fear itself and we hope the media and Obama know that by now. Therefore we can expect the media to continue to slow down their negativism and switch to optimism as we approach inauguration day.
Doug Kass who recently spewed extreme negativism switched sides yesterday. He now says the sentiment in stocks is so low that it is dangerous to sell stocks short and the optimism with bonds is so high now that people should move from bonds to stocks. That would be good for stocks but interest rates would rise in order for the Treasury to be able to fund deficit spending and the stimulation package. Right now the stimulation package seems like a good idea but it could cause a new unsustainable bubble and it could eventually backfire by raising the cost of debt. If for instance the bubble causes a swelling of state and federal employees and they lay off military personnel and close military bases as President Clinton did, then the government entitlements would cause greater accelerating deficits and we would be at a much greater risk of terrorism. American military weakness, the appearance of military retreat/defeat, and spreading mid-east poverty due to low oil prices could put terrorists on the offensive. Any corruption and failure in the new administration will engender the use of the race card and we could be back to 1960's riots and bombings. With the media so closely tied to the Administration both could go down the drain together.
So as investors we need to know the risks, the rewards, the exit strategy, and the trigger points for timing exit decisions. It is never easy and if we think it is we probably are already broke and deluding ourselves. Another concern we should have is that media negativism right now could abort the current rally and set in motion an earlier end to the new administration's honeymoon with the markets. We are watching that closely and we are halting further purchases except for special situations.
Wednesday, January 7, 2009
Pullback and then Market positioned even better for an upside breakout
A nice pullback would set the stage and make many stock point & figure charts show a hair trigger rise would constitute a breakout.
So buy on the dips while we can.
Last night Jim Cramer finally came around and is now bullish. He posits now that the mechanism for the recovery is cash rich China turning inward and building their infrastructure. We said that a few months ago and compared it to the USA in the 1800s when we grew independently of the rest of the world. We became the world's best investment for almost two centuries. Yes, China puts a safety net under commodity prices and prevents spiraling down of a deep recession. He also pointed out that even he predicted the real estate crises will be over later this year and has a chart counting down the days.
The market is looking six to nine months ahead and seeing improvement in the economy when all the multi-trillion $ bailout and stimulus kicks in. We said before that safe high dividend stocks and Chinese investments were the best choice today with emerging markets closely following. We said that in November when the markets were about 20% lower.
Today Asian markets lost yesterday's gains and Europe will likely decline at least 1%. But we must think of the next few days as a buying opportunity. I was about 80% invested and now I will be happy to go in another 15% as opportunities arise. It is estimated that $9 trillion of money was taken out and is just waiting to go back into the stock market.
Yes, the breakout will likely trigger a short squeeze and panic buying. If that happens and the gains exceed 20% in a few weeks it might be wise to take money out but let some ride. If the market goes up too fast it will likely correct down and give up half of the gains. That is when we want to buy in again on those declines.
Example:
VFINX mimics the S&P 500. A 20% gain would bring it to its next resistance level. If it blows through that we would lighten up. See:
http://stockcharts.com/charts/gallery.html?VFINX
So buy on the dips while we can.
Last night Jim Cramer finally came around and is now bullish. He posits now that the mechanism for the recovery is cash rich China turning inward and building their infrastructure. We said that a few months ago and compared it to the USA in the 1800s when we grew independently of the rest of the world. We became the world's best investment for almost two centuries. Yes, China puts a safety net under commodity prices and prevents spiraling down of a deep recession. He also pointed out that even he predicted the real estate crises will be over later this year and has a chart counting down the days.
The market is looking six to nine months ahead and seeing improvement in the economy when all the multi-trillion $ bailout and stimulus kicks in. We said before that safe high dividend stocks and Chinese investments were the best choice today with emerging markets closely following. We said that in November when the markets were about 20% lower.
Today Asian markets lost yesterday's gains and Europe will likely decline at least 1%. But we must think of the next few days as a buying opportunity. I was about 80% invested and now I will be happy to go in another 15% as opportunities arise. It is estimated that $9 trillion of money was taken out and is just waiting to go back into the stock market.
Yes, the breakout will likely trigger a short squeeze and panic buying. If that happens and the gains exceed 20% in a few weeks it might be wise to take money out but let some ride. If the market goes up too fast it will likely correct down and give up half of the gains. That is when we want to buy in again on those declines.
Example:
VFINX mimics the S&P 500. A 20% gain would bring it to its next resistance level. If it blows through that we would lighten up. See:
http://stockcharts.com/charts/gallery.html?VFINX
Tuesday, January 6, 2009
The market is now ready for an upside breakout
The market is now ready for an upside breakout to the 200 day moving average.
http://finance.yahoo.com/q/ta?s=%5EGSPC&t=6m&l=on&z=m&q=l&p=m20,p,e200&a=m26-12-9&c=
China was up 3% again but most of Asia was only fractionally higher. Most of Europe is up about 1.5% this morning. US market futures are positive this morning indicating a positive start to today's trading.
Look at this excellent service and how China is about to break out on the point & figue chart.
http://stockcharts.com/charts/gallery.html?FXI
We talked about the buying stampede starting again yesterday. Last night Kudlow on CNBC went against the negative analysts and suggested that a buying panic was brewing, as the bull market train is about to leave the station. All the negative talk seems to be discounted in the already too-low stock prices.
Another indication that the stock market is returning to normal from panic mode is the volatility index, ^VIX, which is declining from high panic driven levels. We want it to be moderately high so the market cautiously climbs the wall of worry and does due diligence. If it gets low like it did from 2005 to 2007 it shows a lack of due diligence and the possibility of a bubble where everyone just buys and holds as with a Ponzi scam.
VIX should normally be around 20 to 40 when climbing a wall of worry. When a Ponzi Market forms the volatility drops to the 20 to 10 range.
http://finance.yahoo.com/q/ta?s=%5EVIX&t=2y&l=on&z=m&q=l&p=p&a=m26-12-9,v&c=
Good luck with your investment journey
http://finance.yahoo.com/q/ta?s=%5EGSPC&t=6m&l=on&z=m&q=l&p=m20,p,e200&a=m26-12-9&c=
China was up 3% again but most of Asia was only fractionally higher. Most of Europe is up about 1.5% this morning. US market futures are positive this morning indicating a positive start to today's trading.
Look at this excellent service and how China is about to break out on the point & figue chart.
http://stockcharts.com/charts/gallery.html?FXI
We talked about the buying stampede starting again yesterday. Last night Kudlow on CNBC went against the negative analysts and suggested that a buying panic was brewing, as the bull market train is about to leave the station. All the negative talk seems to be discounted in the already too-low stock prices.
Another indication that the stock market is returning to normal from panic mode is the volatility index, ^VIX, which is declining from high panic driven levels. We want it to be moderately high so the market cautiously climbs the wall of worry and does due diligence. If it gets low like it did from 2005 to 2007 it shows a lack of due diligence and the possibility of a bubble where everyone just buys and holds as with a Ponzi scam.
VIX should normally be around 20 to 40 when climbing a wall of worry. When a Ponzi Market forms the volatility drops to the 20 to 10 range.
http://finance.yahoo.com/q/ta?s=%5EVIX&t=2y&l=on&z=m&q=l&p=p&a=m26-12-9,v&c=
Good luck with your investment journey
Monday, January 5, 2009
How in 2000 and again in 2007 the Stock Market was a Ponzi Market
On October 20, 2007 Ponzi manager Bernard Madoffsaid, "In today's regulatory environment, it's virtually impossible to violate rules." About a year later, Madoff—who once headed the NASDAQ Stock Market, told investigators he had lost his investors $50 billion in a Ponzi scheme. He had convinced his followers that he was safe and they should always invest more and never take their money out of his management. If you questioned him or took money out he threatened to dump you because he had an exclusive clientele and not just anyone could join.
The stock market was a full blown Ponzi scheme in 2000 and again in 2007 because investors bought and held. People did not sell out of the market because the market could go up indefinitely as long as new suckers continued to be drawn into the market. Value was no longer measurable in earnings or PE. Value was measured by the last year’s stock market gain and by optimistic company forecasts. Any company or analyst that gave a Pollyanna forecast was applauded and any company or analyst that did not was vilified. Jim Cramer would crucify analysts who did not upgrade the stocks he pushed.
This was nothing new. It happens with every bubble, it happened with the DOT-Com bubble/energy derivatives scandal in 2000 and it happened with the mortgage/derivatives scandal in 2007. In both cases no one at the top could even explain how the profit model worked. In 2000 the con men said internet profit was not important, only market share mattered in the new age business model. In 2007 they said profit was not important, we had discovered a way to give everyone who wanted a house a chance to buy one using leverage. It was the right thing to do and they said it was racist or redlining to require people be qualified for mortgages. And if you said the system was corrupted or out of control Barney Frank and the head of Freddie got very angry with you and would not let you do mortgages.
They were all bullish through half of the decline. Jim Cramer, on Mar. 11, 2008 said, "I think Bob Steel's the one guy I trust to turn this bank around, which is why I've told you on weakness to buy Wachovia." Two weeks later, Wachovia came within hours of failure as depositors fled. Steel agreed to a takeover by Wells Fargo. Wachovia shares lost half their value from Sept. 15 to Dec. 29.
Just as Mr. Madoff pressured his clients to stay fully invested, Mad Money, Bob Brinker, Fast Money, Motley Fools, and almost all the analysts were saying that anyone who thought he could decide when to sell out was a fool to think we could compete with the wizards of Wall Street. And we were especially foolish to think we should get out of the market with interest rates at only 3%. Yet today, now that the horse is out of the barn many accept the bearish advice of Jim Cramer and sell on every market advance to get cash because Jim Cramer says you need cash for the next five years of dooms days. Today some of those who took Mad Money and Motley Fool advice have lost 40% to 60% of their funds and sell on those advances as Jim advises and they buy treasuries that currently give them no interest at all.
We can expect the Mad Money and Fast Money of CNBC (who are now all predicting another -90% type doomsday) to miss about half the market rally before they declare the market bottomed last November. But we instead look forward to a $999Billion stimulation package being designed to make mortgages solvent from the bottom up because none of the $700Billion bank bailout seems to be trickling down yet.
If you follow CNBC advice and sell too late when the market has made half its downward move and then buy back on their advice after the bottom when the market has moved halfway back up… you end up getting back into the market exactly where you got out. That means their advice is worthless and you would have been just as well off doing nothing rather than following them.
The first people to recognize a Ponzi stock or real estate scheme are always considered fools by people brain-washed into buying and holding. When high multiples and forward earnings projections are fabricated on the fly to justify higher stock prices you can usually see that the people are buying due to price appreciation not increased company profitability. Price appreciation without improved profitability requires a Ponzi scheme where people are induced to buy more and hold. Once people begin withdrawing every Ponzi scheme collapses. They must always collapse.
Several years ago I bought a fund group that Bob Brinker recommended. One time I asked to sell some of the fund. They would not do it unless I put it in writing. It took about three weeks to execute so I decided to sell everything I had placed with them. If you think you are treated with an exclusive arrangement where they severely discourage selling you might want to get out. True value or lack thereof can be hidden indefinitely when there are no liquidations.
The Asian markets closed up another 3% today while European and American markets are slower to recover as predicted. We expect the news media and analysts will be quite bullish by inauguration day. Right about then we expect people will start falling over themselves trying to get back in the market. In about three months we expect the stampede to level off and we should consider reallocating investments by then.
Good luck with your investment journey
The stock market was a full blown Ponzi scheme in 2000 and again in 2007 because investors bought and held. People did not sell out of the market because the market could go up indefinitely as long as new suckers continued to be drawn into the market. Value was no longer measurable in earnings or PE. Value was measured by the last year’s stock market gain and by optimistic company forecasts. Any company or analyst that gave a Pollyanna forecast was applauded and any company or analyst that did not was vilified. Jim Cramer would crucify analysts who did not upgrade the stocks he pushed.
This was nothing new. It happens with every bubble, it happened with the DOT-Com bubble/energy derivatives scandal in 2000 and it happened with the mortgage/derivatives scandal in 2007. In both cases no one at the top could even explain how the profit model worked. In 2000 the con men said internet profit was not important, only market share mattered in the new age business model. In 2007 they said profit was not important, we had discovered a way to give everyone who wanted a house a chance to buy one using leverage. It was the right thing to do and they said it was racist or redlining to require people be qualified for mortgages. And if you said the system was corrupted or out of control Barney Frank and the head of Freddie got very angry with you and would not let you do mortgages.
They were all bullish through half of the decline. Jim Cramer, on Mar. 11, 2008 said, "I think Bob Steel's the one guy I trust to turn this bank around, which is why I've told you on weakness to buy Wachovia." Two weeks later, Wachovia came within hours of failure as depositors fled. Steel agreed to a takeover by Wells Fargo. Wachovia shares lost half their value from Sept. 15 to Dec. 29.
Just as Mr. Madoff pressured his clients to stay fully invested, Mad Money, Bob Brinker, Fast Money, Motley Fools, and almost all the analysts were saying that anyone who thought he could decide when to sell out was a fool to think we could compete with the wizards of Wall Street. And we were especially foolish to think we should get out of the market with interest rates at only 3%. Yet today, now that the horse is out of the barn many accept the bearish advice of Jim Cramer and sell on every market advance to get cash because Jim Cramer says you need cash for the next five years of dooms days. Today some of those who took Mad Money and Motley Fool advice have lost 40% to 60% of their funds and sell on those advances as Jim advises and they buy treasuries that currently give them no interest at all.
We can expect the Mad Money and Fast Money of CNBC (who are now all predicting another -90% type doomsday) to miss about half the market rally before they declare the market bottomed last November. But we instead look forward to a $999Billion stimulation package being designed to make mortgages solvent from the bottom up because none of the $700Billion bank bailout seems to be trickling down yet.
If you follow CNBC advice and sell too late when the market has made half its downward move and then buy back on their advice after the bottom when the market has moved halfway back up… you end up getting back into the market exactly where you got out. That means their advice is worthless and you would have been just as well off doing nothing rather than following them.
The first people to recognize a Ponzi stock or real estate scheme are always considered fools by people brain-washed into buying and holding. When high multiples and forward earnings projections are fabricated on the fly to justify higher stock prices you can usually see that the people are buying due to price appreciation not increased company profitability. Price appreciation without improved profitability requires a Ponzi scheme where people are induced to buy more and hold. Once people begin withdrawing every Ponzi scheme collapses. They must always collapse.
Several years ago I bought a fund group that Bob Brinker recommended. One time I asked to sell some of the fund. They would not do it unless I put it in writing. It took about three weeks to execute so I decided to sell everything I had placed with them. If you think you are treated with an exclusive arrangement where they severely discourage selling you might want to get out. True value or lack thereof can be hidden indefinitely when there are no liquidations.
The Asian markets closed up another 3% today while European and American markets are slower to recover as predicted. We expect the news media and analysts will be quite bullish by inauguration day. Right about then we expect people will start falling over themselves trying to get back in the market. In about three months we expect the stampede to level off and we should consider reallocating investments by then.
Good luck with your investment journey
Friday, January 2, 2009
Good luck on your journey
Today the Hang Seng is up 4.5% and France/Germany are presently up about 2%. Britain is lagging and only up about 1.1%. It is the first day of the 2009 market and Asia is in the lead from the start as we indicated. The MAD and FAST money advisors all said the USA would lead us out and are predicting as much as a 90% decline this year on top of the 40% decline last year. Last year at this time they were still saying buy and hold. So at least they are consistent in their market timing. We just need to do the opposite it seems.
U.S. stock-index futures currently are positive, indicating the US markets will have a good start for the first day of trading in 2009 after posting the biggest annual decline since the “big D”. Statistically good market years follow poor years and given that the Democrats will be in power by the end of the month the media will by then stop mentioning the “big D” word and will begin attacking anyone who continues to use the “D” word. Obama will say something original to the nation like, “The only thing we have to fear is fear itself.”
We want the first day, first week and then January of 2009 to be up markets. Then we want the Obama honeymoon to kick in followed by some evidence that foreclosures are decreasing by mid year. That needs to be done without the appearance that the USA is becoming a socialist country. Home prices are now down about 25% on average which is already about as bad as it was in the early 1990’s and needs to be brought under control first.
Good luck on your journey. Always plan your exit strategy. Always follow your plan and do things with a purpose and do not let the brokers and computers make your decisions with market orders and stops. Once they have you in the computer the traders have it easy sweeping you in and out of the market with just a little volatility. If you do not have time to know what to do then do not do it. Currently high dividend stocks with “safe” balance sheets provide the best return. Next beaten down growth stocks should do best.
I believe one of the reasons Jim Cramer does not have good recommendations is because when he angers people they short his recommendations. So the recommendations go up when the viewers are told to buy and then the traders profit by driving them back down. Therefore we will only discuss world markets and market sectors that should do well. Once a bull market is recognized then 90% of the stocks will do well and everyone will claim to be a star. But we will continue to say what we are doing. The word “sell” is in our vocabulary… and we do it on average about once a year.
U.S. stock-index futures currently are positive, indicating the US markets will have a good start for the first day of trading in 2009 after posting the biggest annual decline since the “big D”. Statistically good market years follow poor years and given that the Democrats will be in power by the end of the month the media will by then stop mentioning the “big D” word and will begin attacking anyone who continues to use the “D” word. Obama will say something original to the nation like, “The only thing we have to fear is fear itself.”
We want the first day, first week and then January of 2009 to be up markets. Then we want the Obama honeymoon to kick in followed by some evidence that foreclosures are decreasing by mid year. That needs to be done without the appearance that the USA is becoming a socialist country. Home prices are now down about 25% on average which is already about as bad as it was in the early 1990’s and needs to be brought under control first.
Good luck on your journey. Always plan your exit strategy. Always follow your plan and do things with a purpose and do not let the brokers and computers make your decisions with market orders and stops. Once they have you in the computer the traders have it easy sweeping you in and out of the market with just a little volatility. If you do not have time to know what to do then do not do it. Currently high dividend stocks with “safe” balance sheets provide the best return. Next beaten down growth stocks should do best.
I believe one of the reasons Jim Cramer does not have good recommendations is because when he angers people they short his recommendations. So the recommendations go up when the viewers are told to buy and then the traders profit by driving them back down. Therefore we will only discuss world markets and market sectors that should do well. Once a bull market is recognized then 90% of the stocks will do well and everyone will claim to be a star. But we will continue to say what we are doing. The word “sell” is in our vocabulary… and we do it on average about once a year.
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