Fives years later....seeing a positive attitude towards the economy and investment

March 11,2005

Hello,

It seems that Michael Jackson was in the air. I look at the “thriller” of different mixed singles the market has given us last week and the one commonality is “as easy as one, two, three” Michael Jackson. Yes I know that it was the anniversary of the NASDQ hitting over 5000. But “one bad apple doesn’t spoil the whole bunch”, reminding us all how much everyone has gone thru since that time. Some of us are resigned to it. Some of us are still feeling the “hopie hopie” that everything will come back. Some of us are still in the land of “denial”. Many of us are burned out and bombed out by the market and a few of us are following the old adage “by low, sell hi”.

For those of you waiting for a rebirth of Silicon Valley the wait may be a long time coming. It has been five years since the bubble burst and we are still seeing signs of a severe hang over. Over capacity is epidemic in many industries created by the bubble, Y2K and coupled with some rather dubious financial engineering. But hey the GDP is 12% larger now than in 2000 and low interest rates ,low inflation and steady growth rule the day. Ok so English majors are not making six figures straight out of school, 13 year old wiz kids have all been suspended, and businesses really do have to have a product, generate revenue and earn a profit after all. Yes things have certainly changed from the days of: if it has a cool name, a cool symbol and nobody can figure out what they do the stock went to the moon. But I think the real problem is that we all felt in some way that we all deserved and were entitled to the fun, the excitement and especially the easy money.

The trade deficit has been around for over 40 years and yet none of the dire predictions have come to fruition. The simple fact of the matter is that the US economy is growing much faster than its trading partners and we have become the purchasers of last resort for all goods sold thru out the world. Our largest import is oil and no surprise gee wiz, when oil prices raise the trade deficit goes up. The senate seems poised to allow drilling at ANWR in Alaska in roughly 1000 – 2000 acres, the Alaska wild life refuge is well over 1 billion acres. For those of you worried about the Caribou, since the much maligned pipe line was built in the 1970’s the Caribou population, along with polar bears and other creatures of the great white north has increased significantly. ANWR is the largest find in North America ever with an expectation of producing over 1 million barrels of oil per day. That is as much oil as we import from Saudi Arabia.
Remember new oil discoveries have been meager, yet demand for oil is surging all over the world.


James
1(888)599-1188

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