Wednesday, May 31, 2006

some good news............

ok we have heard your silly market is going down argument if you have been investing so long then you would know that the market multiply of the S&P 500 is lower now than anytime in the last 30 years ....(maybe 40years)

in 1982 after a very long bear market (most of the 1970's) the market rallied in the SUMMER(same as in the 1930's)and started the long bull that lasted about 18 years

Volitility picked up significantly (thats the market ups and downs)

many public companies were being taken private

mergers and aquistions abounded

everyone was negitive on the stock market(humm)

energy ,inflation and interest rates were the issue ,the current levels of all three can hardly compaire to the 1970's

productivity growth is huge and has been for over 6 years

the US GDP is growing like a weed(5.5%)

the Dow and Nasdq are lower than 6 years ago yet the economy is 50% bigger
currencies and commodities are moved by liquidaty ie interest rates the dollars strength or weakness has nothing to do with anything other than interest rates (period)

what we need is the FED to give us a sign (stop raising rates)otherwise we will remain like a fish swimming up stream

Tuesday, May 30, 2006

1987 ,you must be kidding

Are commodities over valued and heading for a bust ? It is interesting to note that the CRB Commodity index which has been credited with a parabolic raise since its low in October 2002 and is up 53%, while the S&P 500 is up 58% in the same period. Mind you the CRB has just emerged form a 20 year bear market .While the S&P in my mind has been in a bear market since March 2000 and is currently trading at the cheapest earnings multiple in over 20 years. I have also heard some silly talk that this market is like 1987 ,forgive me for laughing but the Dow tumbled almost 25% in one day ,that would be like the Dow dropping around 3000 points in one day now. It is also my duty to point out that the Dow had rallied beginning in 1982 and almost tripled from were it started, that would be like seeing the NASDQ around 15,0000 right now. I think many of the pundits and market watchers need to do a little more home work and another demonstration that Bush bashing does little or nothing to help make investment decisions. My point being again that stock and commodity markets are far from over valued and by a long term view still relatively cheap.

Thursday, May 25, 2006

this week in the news


Bernanke called remarks last month to a CNBC reporter that caused a stir in financial markets a "lapse of judgment," at a Senate hearing on financial literacy (WSJ)

The markets are "too freaked out about inflation" the gregarious Chen told Barron's editors Monday. "Inflation is peaking as we speak." (Barons, Chen Zhao, managing editor of the BCA Global Investment Strategy)

YAHOO AND EBAY ANNOUNCED a strategic partnership for Internet searches, advertising, online payments and a co-branded toolbar.(WSJ)

Vonage's offering marked the worst IPO in nearly two years, closing down 13% at $14.85. MasterCard priced at $39, below expectations but still the biggest U.S. IPO since May 2004. (WSJ)

May 25 (Bloomberg) -- Copper rose on the London Metal Exchange on speculation that production may not meet demand this year because of strikes and declining output at some mines.

WASHINGTON (Reuters) - The U.S. economy shot forward at an upwardly revised 5.3 percent annual rate in the first quarter, the fastest growth in 2-1/2 years, as companies built up inventories and exports strengthened, a Commerce Department report on Thursday showed.

``Housing is clearly cooling,'' Fed Bank of Dallas President Richard Fisher said on May 22 after a speech in Dallas. ``All of us are looking at the impact on consumption of the cooling of the housing sector.'' (Bloomberg)

Disposable income, adjusted for inflation, rose 2.1 percent in the first quarter after a 5.1 percent increase. Last month, the government estimated a 3.2 percent rise in first-quarter real disposable income after a 6.7 percent increase. (Bloomberg)

The rise in wages and salaries is ``more fuel for household spending,'' Dean Maki, chief U.S. economist at Barclays Capital in New York, said before the report. ``It also suggests more inflationary pressures because unit labor costs are the biggest costs for businesses.'' (Bloomberg)

too stupid to go on a sucide mission

May 24,2006
Hello,
I have to laugh, Osma bin Laden in a tape recorded message reveals what many have long suspected, that Zacarias Moussaoui was simply too stupid to go on a suicide mission.

What I find very interesting about the current market environment and keeps me looking for further upside in the market are twofold, 1) mergers and acquisitions continue to drive the market action implying that large investors are looking at this time period as an inexpensive time to make transactions . 2) retail investors and the mainstream media are still extremely bearish on the stock market and the entire investment industry bordering on excessive pessimism.

Some people seem to be worrying about the specter of stagflation taking root, but I ask you if higher inflation is on the way why are gold and other commodity prices dropping with the market the last couple of days? What is stagflation you ask? It was another gem brought to us by jimmy carter and company where the economy shows no growth and exhibits lots of inflation. Folks again I ask if inflation is coming commodities should be rallying! In case you have not noticed commodities have sold off with the rest of the market the last two weeks .Besides it is a bit of a illogical jump to go from 4%plus GDP growth and 5.5% productivity growth with 2% inflation to zero growth ,zero productivity growth and runaway inflation ! Me thinks someone is playing politics and talking out there arise. Again I will repeat if interest rates go up stocks go down, if interest rates go down stocks go up .The stock market was for most of the year looking for the FED to stop raising rates, but recent data is suggesting to some that not only will the FED continue but the FED may be forced to raise rates further, thus the sell off.

Again I am not sold on the inflation is coming ,rates are raising argument so look for a shift in the data like the weak durable goods orders to suggest just the opposite and in turn the market will rebound.


James

www.jamesfoytlin.com

Wednesday, May 24, 2006

Excessive Pessimisim


What I find very interesting about the current market environment are twofold, 1) IPO’s and mergers and acquisitions continue to drive the market action implying that large investors are looking at this time period as an inexpensive time to make transactions . 2) Retail investors and the mainstream media are still extremely bearish on the stock market and the entire investment industry bordering on excessive pessimism.

Monday, May 22, 2006

I have heard some dumb things in my time….

Some people seem to be worrying about the specter of stagflation taking root, but I ask you if higher inflation is on the way why are gold and other commodity prices dropping with the market the last couple of days? What is stagflation you ask? It was another gem brought to us by jimmy carter and company were the economy shows no growth and exhibits lots of inflation. Folks again I ask if inflation is coming commodities should be rallying! In case you have not noticed commodities have sold off with the rest of the market the last two weeks .Besides it is a bit of a logical jump to go from 4%plus GDP growth and 5.5% productivity growth with 2% inflation to zero growth ,zero productivity growth and runaway inflation ! Me thinks someone is playing politics and talking out there arise. Again I will repeat if interest rates go up stocks go down, if interest rates go down stocks go up .The stock market was for most of the year looking for the FED to stop raising rates ,but recent data is suggesting to some that not only will the FED continue but the FED may be forced to raise rates further,thus the sell off.

Friday, May 19, 2006

TGIF ,you can say that again TGIF

The market has traded from the top of the trading range to the bottom of the trading range leaving many stocks at their pivot points. With option expiration and the FED looking to better communicate their position this could get very interesting.

Thursday, May 18, 2006

I am not sold on inflation but a slow down in internet traffic now thats something else ...

Will we move into a slow down or recession? The data does not seem to support it nor does the data seem to support any run away inflation. However even I who have been very cynical toward the Chicken Little sky is falling types seeing inflation around ever corner have become a bit more concerned about the over all trends of inflation. I still contend that productivity will mitigate the effects of higher energy costs in most, but not all cases. Another thing that is concerning me more is the little noticed factor that there is a slow down in internet traffic reported by all the sights I monitor ,perhaps we are just hitting the summer doldrums a bit early but it may be signaling a slowdown in future economic activity.

Wednesday, May 17, 2006

We are in deep Do Do ....Rate Warnings

Like I keep saying it is all about rates, the fear of more FED tightening causes the market to sell off .It is the driving factor in the market forget about Iran, forget about high energy prices , forget about the sinking dollar and forget about sky high commodity prices .It is all about raising rates. The perception has changed that the FED will stop to the FED cant stop raising rates.
















May 17 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke, who pledged to continue the policies of his predecessor, is sticking close to Alan Greenspan's opposition to regulation of hedge funds.

In the first in-depth study of its kind, the U.S. Government Accountability Office estimated that taxpayers who took their case to the IRS's appeals division won at least some relief in about 41% of the cases. (WSJ)

WASHINGTON – For the Bush administration, awarding Libya this week with restoration of full diplomatic relations should be a lesson to Iran and North Korea. Give up your nuclear weapons programs just as Libyan leader Muammar Qaddafi did, administration officials argue, and you too can reap the benefits of political and economic ties with the United States.( CSM)

May 17 (Bloomberg) -- Japan's 10-year government bonds were set for the biggest gain in a month on speculation inflation will slow after the yen rallied to an almost an eight-month high against the dollar.

Industrial production rose 0.8 percent in April after an increase of 0.6 percent in March. The levels of the output index for January through March were revised upward, and industrial production is now reported to have increased at an annual rate of 5.4 percent in the first quarter. In April, manufacturing production advanced 0.7 percent, and the output indexes for mining and for utilities both increased 0.9 percent. At 112.3 percent of the 2002 average, overall industrial output was 4.7 percent above its April 2005 level (FED)

The rate of capacity utilization for total industry climbed 0.5 percentage point, to 81.9 percent, a rate almost 1.0 percentage point above its 1972-2005 average. The factory operating rate, at 80.8 percent, was 1.0 percentage point above its long-run average. The operating rate for mining jumped to 89.8 percent, a rate 2.5 percentage points above its 1972-2005 average. The capacity utilization rate for utilities also increased, but it remained below its long-run average.(FED)

(CNSNews.com) - Former vice presidential candidates John Edwards and Jack Kemp joined forces on Tuesday in Pentagon City, Va., calling on corporations to offer automatic 401(k) options in an effort to boost the financial security of middle and lower-income American families.

Tuesday, May 16, 2006

So what kind of investor are you ?

So what kind of an investor are you? Over the years I have noticed certain personality traits that seem to make someone a more successful as an investor. The constructive traits for investors are usually pretty obvious it’s the negative attitudes and traits that seem to really get in the way. Here are a few of those negative traits : 1) Know it alls ,these types are usually there own worst enemy ,they are smart but often are short sighted and more interested in trying to out smart everyone than make money .2) Cheap investors, these are people who are more worried about how much the fund or broker or firm makes than how much they make . They will often forgo investment action to avoid paying a commission because they don’t want anyone else to make any money, instead of thinking about what the potential return is to them selves. They will constantly get hung up over a commission or fee instead of looking at total return and fail to make the necessary moves. Investing contrary to popular belief is about making money, not about saving money. 3) The follow the crowd type, these are people that base there investment decisions on social status and weather one of there friends or relatives is buying the same investment. These folks are very susceptible to hot tips and rarely listen to sound investment advice. They will often buy the hot stock of the moment never wanting to be left out.4) The procrastinator, these are people who are always looking for that perfect time to make their move ,not realizing that investing is often more about time in the market not timing the market. 5) The no follow through type, these are people that make lots of sensible investment plans but never follow through or they start and have very unrealistic expectations as to their results and how quickly they are going to see any return. They will often get discouraged easily and drop there plans only to restart with new plans at a later date. 6) Investors that lack the understanding that stocks that go up the fastest are also stocks that also go down the fastest. It is important to recognize what you’re getting yourself into because as in life it is often easier to get into things than get out of them and the risk of buying a particular stock has little or nothing to do with the performance of that stock. 7) Envy, these are investors that get annoyed with the success of others. Instead of trying to emulate other successful investors they will reject all the steps of proper investing and continual practice unsound investing .Each failure only feeds on it self and strengthens their resolve. The qualities that seem to work best are patients, persistence, making a plan and sticking to it ,that means having follow through .In the long run for most of us a long term well executed plan outweighs most stock trading brilliance and it is the time in the market out weighs timing the market.


James
www.jamesfoytlin.com

EFT's

Tired of Mutual Funds try trading EFT’s (closed end) Index funds .EFT’s (exchange traded funds) come in all shapes and sizes ,from traditional indexes like the S&P 500 ,the Dow Jones Industrial’s ,or sector funds like energy and technology or country funds like Brazil, Russia ,India ,China and so on. These funds can be purchased with a single commission and you don’t have to worry about large front end or back end loads. I use a simple asset allocation model to pick sectors .It is a great way for a long term investor or even a short term speculator to play international markets as well as commodities.

Monday, May 15, 2006

commodity prices may have hit a short tern high

Looks like commodity prices may have hit a short tern high and are in the process of backing off and consolidating. Long turn I would be very bullish on energy and commodities how ever short term I think we got a bit ahead of our self’s. Remember increased volatility is signaling a market transitioning from long term bear to long term bull market. Volatility leads to increased opportunities for trading profits. This market is primarily driven by interest rates, rates keep raising the market stays flat, if rates level off the market moves higher. This bull will be different than the last several in that energy and commodities will lead the market higher than play the role as the usual counter weight to what ever the market high fliers are at the moment. The dollars strength or weakness is ties directly to the perception as to weather interest rates will continue climbing or weather they are flattening out and the dollars price movement signaling much of the direction of foreign markets.

Friday, May 12, 2006

Do you say to your self it's Greek to me ?


Yes you can, for those of you who are having difficulty reading and understanding your financial statements; I am now offering a new service, it is obviously called Translating your Statements .Bring in your bank, brokerage, IRA or mutual fund statements and I will teach you how to read and understand them. It is quick and easy so give me a call at 1(888)599-1188 and set up an appointment today.

Thursday, May 11, 2006

It's called the 401 Keg Plan

FOR YOUR RETIREMENT: If you had purchased $1,000.00 of Nortel stock one year ago, it would now be worth $49.00.

With Enron, you would have had $16.50 left of the original $1,000.00.

With WorldCom, you would have had less than $5.00 left.

But, if you had purchased $1,000.00 worth of Beer one year ago, drank all the beer , then turned in the cans for the aluminum recycling refund, you would have had $214.00.

Based on the above, current investment advice is to drink heavily and recycle.
It's called the 401 Keg Plan

back off jack chuckies back

And Chuckies is the spector of higher rates. Sorry folks looks like we are back to fears of higher interest rates ,so the market talking its clue is selling off .Again the main dynamic in this market is very simple if rates look to be reaching a ceiling or ease the market goes up if rates look to continue to raise the market sells off. It is really rather simply.

Rates Move Up Step Up CD's Follow

3 NC 3mo Step-Up CD
Description
Higher coupons vs bullets due to call risk
Settlement
May 18, 2006
Maturity
May 18, 2009
Coupon Rate Schedule (annualized)
1st 6mths 4.75% 2nd 6mths 5.00% 3rd 6mths 5.25% 4th 6mths 5.50% 5th 6mths 6.00% 6th 6mths 7.00%


contact me for prospectus and details

Wednesday, May 10, 2006

Breaking News :

April Tax Revenue 2nd-Highest in HistoryMay 10 2:23 PM US/Eastern Email this story

By MARTIN CRUTSINGERAP Economics Writer
WASHINGTON
A flood of income tax payments pushed up government receipts to the second-highest level in history in April, giving the country a sizable surplus for the month.
In its monthly accounting of the government's books, the Treasury Department said Wednesday that revenue for the month totaled $315.1 billion as Americans filed their tax returns by the April deadline. The gusher of tax revenue pushed total receipts up by 13.4 percent from April 2005.
It marked the largest one-month receipt total since the government collected $332 billion in revenue in April 2001, reflecting a boom in capital gains from stock investors lucky enough to cash out their investments before the bursting of the stock market bubble in early 2000.

data points and DICTATORS who the MAKE RICH LIST

May 9th 2006

Hello,


It is interesting to note that if all else fails and you cant make it as a professional athlete, hot shot investment banker or a technology entrepreneur you can always be come a dictator of a third world country like Commandante-for-life Fidel Castro and despite his vow of poverty he has amassed a fortune close to one billion dollars off the toils of the proletariat, well done comrade. Speaking of the toiling proletariat, the proletariat is bidding up the Dow Jones to new highs everyday in the hopes that the FED maybe done raising rates and that inflation remains under control. As a member of the downtrodden class of stock brokers I wholeheartedly embrace the raise of the Dow and hope the investor class can overcome and rise up to bid the index even higher.

Does anyone find it as odd as I do that you can have a lower consumer confidence number, but increased spending or a higher productivity number coupled with higher employment cost? Doesn’t seem to make a lot of sense does it. I have pointed this out before that I think in a world with almost instantaneous access to information Consumer Sentiment surveys seem a bit outmoded and only seem to prove that what people say and what people do are often very different. Most polls are set up to create a certain response, and people will often tell the pollsters what they want to hear. The pollsters like most of the media are focused on doom and gloom where as up to date sales data simply is what it is.


Since you keep asking, yes there is a New Way to Invest in Gold (the barbarous relic) for Equity Investors. Street TRACKS® Gold Shares (“Gold Shares”) offer investors a new, innovative, relatively cost-efficient and secure way to access the gold market. Gold Shares are intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy and sell that participation through the trading of a security on a regulated stock exchange. Gold Shares represent fractional, undivided beneficial ownership interests in the Trust, the primary asset of which is allocated (or secured) gold. Gold Shares are intended to lower a large number of the barriers preventing investors from using gold as an asset allocation and trading tool. These barriers have included the logistics of buying, storing and insuring gold. Gold Shares are set up like an ETF or a closed end fund that is easily tradable like any other equity.

If this is something you maybe interested in or are just looking to get more information I would be glad to help.

James
www.jamesfoytlin.com

Tuesday, May 09, 2006

Dow Nears All-Time High !

The Dow pressed toward its all-time closing high although investors anxiously awaited the Federal Reserve's next move on interest rates when policymakers meet Wednesday. Many on Wall Street are hoping the Fed will signal that an end to its rate tightening is near.

But analysts say the Dow is poised to break its record and could push higher. Ken Tower, chief market strategist for Schwab's CyberTrader, said investors appeared increasingly optimistic about the market, especially after stocks held onto their sharp gains from the end of last week.

"People became much more bullish on Friday morning, and the fact they didn't sober up over the weekend is a very positive sign for the market," Tower said. "Of course, everything depends on the Fed. But at least for the moment, you have to look at the market in a positive light." (CHRISTOPHER WANG)

Monday, May 08, 2006

Help Wanted Commandante-for-life

It is interesting to note that if all else fails and you cant make it as a professional athlete, hot shot investment banker or a technology entrepreneur you can always be come a dictator of a third world country like Commandante-for-life Fidel Castro and despite his vow of poverty he has amassed a fortune close to one billion dollars off the toils of the proletariat, we done comrade. Speaking of the toiling proletariat, the proletariat is bidding up the Dow Jones to new highs everyday in the hopes that the FED maybe done raising rates and that inflation remains under control. As a member of the downtrodden class of stock brokers I wholeheartedly embrace the raise of the Dow and hope the people overcome and raise up to bid the index up even further.

A New Way to Invest in Gold the "barbarous relic".

Want to trade Gold but not sure how?

Street TRACKS® Gold Shares offers investors an opportunity to take advantage of price movements in the “barbarous relic” , Gold.

"Street TRACKS® Gold Shares (“Gold Shares”) offer investors a new, innovative, relatively cost-efficient and secure way to access the gold market. Gold Shares are intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy and sell that participation through the trading of a security on a regulated stock exchange"

"Gold Shares represent fractional, undivided beneficial ownership interests in the Trust, the primary asset of which is allocated (or secured) gold. Gold Shares are intended to lower a large number of the barriers preventing investors from using gold as an asset allocation and trading tool. These barriers have included the logistics of buying, storing and insuring gold. "

This is solely intended for informational purposes and not a recommendation. You should consult an investment advisor and read the prospectus before making any investment decisions.
and of coarse let me know if I can be of any service...

Friday, May 05, 2006

Happy Cinco De Mayo

Data Points

Does anyone find it as odd as I do that you can have a lower consumer confidence number, but increased spending or a higher productivity number coupled with higher employment cost? Doesn’t seem to make a lot of sense does it. I have pointed this out before that I think in a world with almost instantaneous access to information Consumer Sentiment surveys seem a bit outmoded and only seem to prove that what people say and what people do are often very different. Most polls are set up to create a certain response, and people will often tell the pollsters what they want to hear. The pollsters like most of the media are focused on doom and gloom where as up to date sales data simply is what it is.

Thursday, May 04, 2006

Productivity Gains Fail to Keep Pace With Labor Costs

Productivity Gains Fail to Keep Pace With Labor Costs (Update2)
May 4 (Bloomberg) -- Productivity gains failed to keep pace with rising wages and benefits in the first quarter, pointing to greater risk of accelerating inflation.
Employer costs rose at an annual rate of 2.5 percent after a 3 percent rise in the previous three months, the Labor Department said in Washington. Productivity, a measure of how much an employee produces for each hour of work, increased at an annual rate of 3.2 percent after a 0.3 percent decline.

U.S. productivity expanded at a robust clip in the first quarter, helping to offset a strong quarterly gain in hourly compensation. Separately, jobless claims rose to a six-month high in the latest week (WSJ)

Wednesday, May 03, 2006

oh baby please dont let me be misunderstood (update)

Hope you had a Marx Free May Day ,

It wasn’t the protests, it wasn’t the price at the pump, it was the “money honey” Maria Bartiromo and her confession that FED Chief Ben Bernanke felt his testimony last week had been misunderstood and that he had not intended the markets to infer that the incremental rate raises of the last several years was just about done. The market immediately went from positive to negative. Readers of this blog will note that for some time I have been pushing the point home that if the FED stops the markets goes, if the FED holds the line and continues the same we should expect the same. I can not emphasize enough that the rate increases have keep the market in check. Meanwhile the economy has expanded, corporate profits have ballooned and consumers have spent yet the markets have simply not responded. The key ingredient is the FED tightening cycle. The market often takes the” he’s guilty until he proves himself innocent “of any new FED Chair. Mr. Bernanke is no exception and simply under a microscope for any and everything he does.

The Iranian government continues to play the oil card, but for the most part the market is taking it all in stride. Interest rates seem to be the primary dynamic controlling the direction of the market. The fear now is that after settling down the economy has regained momentum rising renewed fears of, inflation is coming, inflation is coming. This one if by land two if by see inflation mantra seems to be wearing a little old for most investors ,but to many old timers the specter of an inflationary spiral is a process where by, a little bit of inflation leads to a little bit more and so on, till we are revisiting the dreaded Carter years. What you may be wondering is weather the trend of enormous productivity growth we have witnessed the last 5-6 years will continue? I certainly think so and this is why, as new technology continues to become disseminated and more and more people begin to understand how to implement and use new technology to improve their lives, the effects of these changes on the work place generate huge changes in the way we all live and do business. This process is beginning to create significant life style changes. These changes are keeping a lid on inflation so far and I think they will continue to do so for the near future.

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And finally no email would be complete with out mentioning energy prices ,folks I would suggest stop complaining about gas prices and buy energy stocks, it is really that simply.

James
www.jamesfoytlin.com

Monday, May 01, 2006

Manufacturing Growth Unexpectedly Accelerates

U.S. Economy: Manufacturing Growth Unexpectedly Accelerates
May 1 (Bloomberg) -- The U.S. economy showed a broad-based expansion and more inflationary pressures just as the Federal Reserve contemplates a pause in its interest-rate increases.

May Day 2006


Have a Marx Free May Day