just trying not to be"... stuck on stupid?"......

September 27, 2005

Hello,

Some sound advice was offered to all investors this week in the after math of hurricane Rita by National Guard Lt. General Russel Honore, when he asked rhetorically “You are stuck on stupid”? Often the stock market has a habit of making anyone feel that way. Wall Street firms JP Morgan and Goldman Sachs not to be out done are trying to factor the risk of global warming and climate change into your portfolio. Ask any Dinosaur how climate change can be detrimental to your health. As for me I would just be happy if some one could accurately predict the weather for tomorrow.

After the worst week in three months on Wall Street, there still seems a chance that September could finish positive for a change, considering the market sells off with higher oil prices and rallies when they subside. While Katrina took many by surprise in typical fashion lighting seldom strikes twice in the same spot and so Rita caused far less damage then was originally feared. Although there is much debate on the health of the oil industry in the gulf, the big issues are simple; the energy infrastructure in the USA has been significantly underinvested in for some time perhaps 40 years so there really is just not much room for “Murphy’s law” or a category 4-5 hurricane in the gulf.

Energy stocks like housing stocks seems to be operating under the, “if it can’t get any better than this, some cataclysmic event comes along that makes it even better”. All I have to say is that after 4 hurricanes in south Florida last year home prices showed enormous price appreciation. It is the same theme over and over again. My concern is that many of the home builders have traded off there highs significantly, this may be the signal of a coming slow down in housing or just another temporary consolidation, the jury is still out for the moment .Remember that in situations of over speculation things often look best just before the damn breaks, like in March of 2000 with the Tech and dot com bubble.

Rates look to keep rising as the FED seeks to temper the huge infusion of aid to the gulf region knowing that adding enormous amounts of liquidity should give the economy a bit of a sugar rush for the next several months.

And on a final note one look at the “new apprentice” it becomes obvious that Martha Stewart belongs in the kitchen. Don’t for get to check out my website www.jamesfoytlin.com and blog http://onesmallvoice.blogspot.com/ for updates.


James