"The world is more likely to run out of uses for oil than Saudi Arabia is going to run out of oil"

June 11, 2005

Hello,

No compelling reason, that’s what they tell me simply no compelling reason to change, rollover, get involved, buy, sell or do just about anything. Folks it is a matter of time in the market not timing. Most of the time in a one year period you have a 70% chance you will make money and 30% you won’t, but extend that out 5 years and your odds increase for a positive return to 88% and a chance of a loss receded to 12%. Historically over any five year period the average return is 11.06 %, per year but if you missed the best 10 days your return drops to 5.94%.If you miss the best 40 days (2months of trading in a five year period) in a 5 year period your return declines to a negative return of – 4.11% annualized. The point being that waiting for the right time to invest overtime increases your chance of a negative return significantly. From December 1992 to December 2002 if you invested $1000 on the 10 best days over that 10 year period your total return would be 8.89% if you invested $1000 on the 10 worst days your return would be 7.28%. The best day being the day the market hit a year low and the worst day being the day the market hit a year high. Again you have to be in it to win it, worrying about the best fund or the right time to invest makes little or no difference .It is the long term commitment of staying fully invested that counts.

Greenspan speaks and the market yawns. He basically stuck with the “Goldie Locks” scenario, the economy is not too hot, not too cold and FED remains undeterred to continue to slowly raise long term rates. The bond market sees it different and continues to signal the rate raises from the FED are more behind us than in front of us. Maybe instead of oil prices being a curse, they are a blessing. The net effect of higher crude is to put the brakes on the economy just slightly there by keeping long term interest rates down. Low long term interest rates propel the housing and construction industry to robust growth.

First it was wearing women’s underwear on the head, now the US Military is playing Christine Aguilera tunes to torture the prisoners at Gitmo...oh the humanities …Drawn by the music and quality meals Club med is now looking to take over Gitmo and set up a resort, Club Gitmo. By the way I am not sure if Club Gitmo guests will be encouraged to wear women’s underwear on there heads or not. Rumor has it that Senator Ted Kennedy will be offering swimming lessons( sorry couldn’t resist that one). In other news the great Satin’s own Sean Penn is going to Iran to report on the up coming “election” and imparting us his wisdom on one of the most tyrannical Regimes on earth that puts women to death for being raped. And finally am I the only one that is amused by seeing Hilary Clinton speaking about “to much sex on television”, well Senator is depends how you define “sex” don’t you think?



James