Thursday, November 30, 2006

buying on the dips is back

All I have to say after the last couple of days is," can you say buy on the dips "

Wednesday, November 29, 2006

EU exports its way

So the news is out that European Companies have been gaining an ever large percentage of exports to developing countries. For many of you a light went off in your head: now it makes some sense why European stock markets have out performed in the face of higher interest rates and stagnant local economies with shrinking populations, high unemployment and large entitlement costs. For years some European economies like Germany and Italy have been known as export machines deriving a significant portion of there GDP’s from exports. The latest data runs counter to what many had suspected given the strength of the Euro. EU economist have worried for some time that a stronger Euro would make EU exports uncompetitive. My theory is a bit different, frequent readers of this blog are aware that I often view the EU as the weaker and most trouble some of the worlds economic trading blocks .There are however some very first rate companies in the EU. Many of them particularly some of the Spanish banks and Telecoms have used the strong Euro to buy assets in emerging markets and as these markets prosper so does the EU.

Monday, November 27, 2006

News News News

Nov. 27 (Bloomberg) -- U.S. consumers shopping over the Thanksgiving holiday weekend spent 19 percent more per person than they did last year as retailers slashed prices to attract customers.

According to ShopperTrak RCT Corp., which tracks total sales at more than 45,000 mall-based retail outlets, total sales rose 6 percent to $8.96 billion on Friday, the start of the holiday shopping season, compared to the same day a year ago. (AP)

Nov. 27 (Bloomberg) -- Europe, where worker anger over globalization sparks street protests, is surpassing the U.S. and Japan in the race to reap benefits from the explosion in world trade and investment.

CANBERRA, Australia (AP) -- An Australian inquiry on Monday recommended police pursue criminal charges against 12 business officials in connection with multimillion-dollar kickbacks that the country's monopoly wheat exporter paid under the U.N.'s Iraqi oil-for-food program.

Nov. 27 (Bloomberg) -- Crude oil rose after Saudi Arabia's oil minister said his country may support a second cut in OPEC's output in two months to prop up prices, which have fallen about 24 percent since July.

Detectives will fly to Moscow and Rome this week in an attempt to unravel the mysterious radioactive poisoning in London of Alexander Litvinenko, the Russian defector. (Telegraph UK)

LONDON — A dossier drawn up by Alexander Litvinenko on the Kremlin's takeover of the world’s richest energy giant will be given to Scotland Yard today as police investigate the former KGB spy's secret dealings with some of Russia's richest men.(FOX NEWS)

CARACAS, Venezuela (Reuters) - Venezuela's leftist President Hugo Chavez on Sunday promised hundreds of thousands of supporters he would win a resounding victory in his December 3 reelection bid he describes as a challenge to Washington.

An investigation was under way last night into Russia's black market trade in radioactive materials amid concern that significant quantities of polonium 210, the substance that killed former spy Alexander Litvinenko, are being stolen from poorly protected Russian nuclear sites. (Observer UK)

POLICE and councils are considering monitoring conversations in the street using high-powered microphones attached to CCTV cameras, write Steven Swinford and Nicola Smith. (Times On Line)

BAGHDAD, Nov. 25 — The insurgency in Iraq is now self-sustaining financially, raising tens of millions of dollars a year from oil smuggling, kidnapping, counterfeiting, connivance by corrupt Islamic charities and other crimes that the Iraqi government and its American patrons have been largely unable to prevent, a classified United States government report has concluded. (NYT)

RIYADH, Saudi Arabia (AP) - Vice President Dick Cheney arrived Saturday in Saudi Arabia for talks with King Abdullah, apparently seeking the Sunni royal family's influence and tribal connections to calm Iraq after an especially violent week.

Russia has begun deliveries of the Tor-M1 air defence rocket system to Iran, Russian news agencies quoted military industry sources as saying, in the latest sign of a Russian-US rift over Iran. "Deliveries of the Tor-M1 have begun. The first systems have already been delivered to Tehran," ITAR-TASS quoted an unnamed, high-ranking source as saying Friday. (AFP)

The euro’s strength could put the European Central Bank under fresh political pressure not to raise interest rates again after the expected quarter percentage point rise to 3.5 per cent on December 7. (FT)

Friday, November 24, 2006

So you asked about IPO's

November 22,2006

Happy Thanksgiving,

If your broker is the investment banker or in the selling group of an IPO (Initial Public Offering) you may have the opportunity to get some shares at the offering price. You should read the Red Herring or Prospectus carefully to gather information on the offering. You have to put in an indication (inquiry) saying you’ll take 500 shares. Once the IPO is priced (usually the night before) then the shares are distributed. If it’s a very hot IPO it is VERY HARD TO GET SHARES on the offering price. Most firms reward their best customers with shares. Many firms don’t like it when an investors gets the shares then sells them the same day ,this is called flipping, however no one is ever allowed to tell you your not allowed to make money. If you can’t get the shares on the offering price this does not stop you from buying the shares in the open market after the offering. Warning IPO’s are generally considered a very high risk investment.

Semiconductors and semi equipment makers are starting to look very positive remember they moved first in the fall of 95 then into the first 1/2 of 96 and the rest is history. They also are very cyclical in nature so you have to buy when P/E’s are high and sell when P/E’s are low. As a sector semi’s often signal a big move in the market. Traditionally they stay flat to down for a very long time, but once they get going its time to jump on. I often tell clients better to buy them on the way up then look for bargains and wait. You could wait a very long time.

Another major positive is the increased take over activity and continued preponderance of the market to finish strong at day end. Takeovers and mergers continue to suggest that many perceive the market to be a bargain and strong day end rally’s are a sign of institutional money getting into the market after it fails to sell off.



Wednesday, November 22, 2006

The Great Thanksgiving Hoax

The Great Thanksgiving Hoax
By Richard J. Maybury Posted on 11/20/1999

Each year at this time school children all over America are taught the official Thanksgiving story, and newspapers, radio, TV, and magazines devote vast amounts of time and space to it. It is all very colorful and fascinating.

It is also very deceiving. This official story is nothing like what really happened. It is a fairy tale, a whitewashed and sanitized collection of half-truths which divert attention away from Thanksgiving's real meaning.

The official story has the pilgrims boarding the Mayflower, coming to America and establishing the Plymouth colony in the winter of 1620-21. This first winter is hard, and half the colonists die. But the survivors are hard working and tenacious, and they learn new farming techniques from the Indians. The harvest of 1621 is bountiful. The Pilgrims hold a celebration, and give thanks to God. They are grateful for the wonderful new abundant land He has given them.
The official story then has the Pilgrims living more or less happily ever after, each year repeating the first Thanksgiving. Other early colonies also have hard times at first, but they soon prosper and adopt the annual tradition of giving thanks for this prosperous new land called America.

The problem with this official story is that the harvest of 1621 was not bountiful, nor were the colonists hardworking or tenacious. 1621 was a famine year and many of the colonists were lazy thieves.

In his 'History of Plymouth Plantation,' the governor of the colony, William Bradford, reported that the colonists went hungry for years, because they refused to work in the fields. They preferred instead to steal food. He says the colony was riddled with "corruption," and with "confusion and discontent." The crops were small because "much was stolen both by night and day, before it became scarce eatable."
In the harvest feasts of 1621 and 1622, "all had their hungry bellies filled," but only briefly. The prevailing condition during those years was not the abundance the official story claims, it was famine and death. The first "Thanksgiving" was not so much a celebration as it was the last meal of condemned men.

But in subsequent years something changes. The harvest of 1623 was different. Suddenly, "instead of famine now God gave them plenty," Bradford wrote, "and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God." Thereafter, he wrote, "any general want or famine hath not been amongst them since to this day." In fact, in 1624, so much food was produced that the colonists were able to begin exporting corn.

What happened?
After the poor harvest of 1622, writes Bradford, "they began to think how they might raise as much corn as they could, and obtain a better crop." They began to question their form of economic organization.

This had required that "all profits & benefits that are got by trade, working, fishing, or any other means" were to be placed in the common stock of the colony, and that, "all such persons as are of this colony, are to have their meat, drink, apparel, and all provisions out of the common stock." A person was to put into the common stock all he could, and take out only what he needed.

This "from each according to his ability, to each according to his need" was an early form of socialism, and it is why the Pilgrims were starving. Bradford writes that "young men that are most able and fit for labor and service" complained about being forced to "spend their time and strength to work for other men's wives and children." Also, "the strong, or man of parts, had no more in division of victuals and clothes, than he that was weak." So the young and strong refused to work and the total amount of food produced was never adequate.

To rectify this situation, in 1623 Bradford abolished socialism. He gave each household a parcel of land and told them they could keep what they produced, or trade it away as they saw fit. In other words, he replaced socialism with a free market, and that was the end of famines.
Many early groups of colonists set up socialist states, all with the same terrible results. At Jamestown, established in 1607, out of every shipload of settlers that arrived, less than half would survive their first twelve months in America. Most of the work was being done by only one-fifth of the men, the other four-fifths choosing to be parasites. In the winter of 1609-10, called "The Starving Time," the population fell from five-hundred to sixty.

Then the Jamestown colony was converted to a free market, and the results were every bit as dramatic as those at Plymouth. In 1614, Colony Secretary Ralph Hamor wrote that after the switch there was "plenty of food, which every man by his own industry may easily and doth procure." He said that when the socialist system had prevailed, "we reaped not so much corn from the labors of thirty men as three men have done for themselves now."
Before these free markets were established, the colonists had nothing for which to be thankful. They were in the same situation as Ethiopians are today, and for the same reasons. But after free markets were established, the resulting abundance was so dramatic that the annual Thanksgiving celebrations became common throughout the colonies, and in 1863, Thanksgiving became a national holiday.

Thus the real reason for Thanksgiving, deleted from the official story, is: Socialism does not work; the one and only source of abundance is free markets, and we thank God we live in a country where we can have them.

This article originally appeared in The Free Market, November 1985.

Monday, November 20, 2006

Economist Milton Friedman Dies At 94

That vision has changed America, and it is changing the world.
Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three U.S. presidents, died Thursday at age 94. Friedman died of heart failure after being rushed to a hospital near his San Francisco home, his daughter, Janet Martell, told The Wall Street Journal. "Milton's passion for freedom and liberty has influenced more lives than he ever could possibly know," said Gordon St. Angelo, the Milton and Rose D. Friedman Foundation's president and CEO, said in a statement. "His writings and ideas have transformed the minds of U.S. presidents, world leaders, entrepreneurs and freshmen economic majors alike." In more than a dozen books and a column in Newsweek magazine, Friedman championed individual freedom in economics and politics. His theory of monetarism, adopted in part by the Nixon, Ford and Reagan administrations, opposed the traditional Keynesian economics that had dominated U.S. policy since the New Deal. He was a member of Reagan's Economic Policy Advisory Board. His work in consumption analysis, monetary history and stabilization policy earned him the Nobel in economics in 1976. "He has used a brilliant mind to advance a moral vision - the vision of a society where men and women are free, free to choose, but where government is not as free to override their decisions," President Bush said in 2002. "That vision has changed America, and it is changing the world." Friedman's death was announced during a conference in Washington at the Cato Institute, a libertarian think tank. The academics and policy makers in attendance observed several moments of silence, reports The Wall Street Journal. Friedman favored a policy of steady, moderate growth in the money supply, opposed wage and price controls and criticized the Federal Reserve when it tried to fine-tune the economy. A believer in the principles of 18th century economist Adam Smith, he consistently argued that individual freedom should rule economic policy. Outspoken and controversial, Friedman saw his theories attacked by many traditional economists such as Harvard's John Kenneth Galbraith. In an essay titled "Is Capitalism Humane?" he said that "a set of social institutions that stresses individual responsibility, that treats the individual ... as responsible for and to himself, will lead to a higher and more desirable moral climate." Friedman acknowledged that "pure capitalism" did not exist, but said that nations that cherished freedom must strive to keep the economy as close to the ideal as possible. He said government should allow the free market to operate to solve inflation and other economic problems. But he also urged adoption of a "negative income tax" in which people who earn less than a certain amount would get money from the government. He lived to see free market reforms spread in the former communist world and Latin America, but played down his own influence. "I hope what I wrote contributed to that, but it was not the moving force," Friedman told The New York Sun in March 2006. "People like myself, what we did was keep these ideas open until the time came when they could be accepted." Born in New York City on July 31, 1912, Friedman began developing his economic theories during the Great Depression when President Franklin D. Roosevelt's based his New Deal on the ideas of Britain's John Maynard Keynes, the most influential economist of the time. Keynes argued that the government should intervene in economic affairs to avoid depressions by increasing spending and controlling interest rates. Friedman graduated from Rutgers University in 1932 and earned his master's degree the following year at the University of Chicago. After working for the National Resources Commission in Washington from 1935 to 1937, Friedman was a member of the staff of the National Bureau of Economics Research in New York from 1937 to 1945 and received his doctorate from Columbia University in 1946. After World War II, he taught at the University of Minnesota, then returned to the University of Chicago. He became a senior fellow at the Hoover Institution at Stanford University in 1977. Friedman married Rose Director in 1938. They had two children, Janet and David, and she was co-author of some of his books. Among his most famous books were: "Price Theory," 1962 (with Rose Friedman); "Capitalism and Freedom," 1962 (with Anna J. Schwartz); "An Economist's Protest," 1972; "There Is No Such Thing As a Free Lunch," 1975; "Price Theory," 1976; and "Free to Choose," 1979, co-authored with his wife. "Free to Choose" also was a series on the Public Broadcasting Service. Friedman wrote columns for Newsweek from 1966 to 1983 and was one of the few economists to bridge the gap between academia and the public. He involved himself in political campaigns, supporting Barry Goldwater in 1964 and Richard Nixon in 1968. He served on Nixon's commission for an All-Volunteer Army in 1969 and 1970. In an interview with Playboy magazine in 1973, later republished in a collection of his essays titled "Bright Promises, Dismal Performance," Friedman said he was encouraged by an apparent trend away from government control. "There are faint stirrings and hopeful signs," he said. "Even some of the intellectuals who were most strongly drawn to the New Deal in the '30s are rethinking their positions, dabbling just a little with free-market principles. They're moving slowly and taking each step as though they were exploring a virgin continent. But it's not dangerous. Some of us have lived here quite comfortably all along." Friedman, whose wit made him a popular guest on radio and television shows, appeared to enjoy sparring with other economists. In the Playboy interview, he referred to his disagreement with Galbraith, who endorsed wage and price controls. When Nixon went against Friedman's advice and reluctantly imposed the controls in an effort to slow inflation, Friedman said he wrote a note to Galbraith. "You must be as chagrined as I am to have Nixon for your disciple," Friedman wrote. Galbraith didn't reply, Friedman said.
Copyright © 2006, All Rights Reserved.

Friday, November 17, 2006

News New s News

Nov. 17 (Bloomberg) -- Housing starts in the U.S. tumbled in October to the lowest level in more than six years, as waning home sales and swollen inventories discouraged new projects.

Nov. 17 (Bloomberg) -- Oil fell near a 17-month low in New York because warm weather in parts of the U.S. is decreasing heating demand while traders say OPEC will not meet pledges to reduce production.

Nov. 17 (Bloomberg) -- Federal Reserve Bank of Dallas President Richard Fisher said the dollar is likely to remain the world's top currency in central bank reserves because of U.S. growth rates and success in containing inflation.

NEW YORK (MarketWatch) -- Nymex Holdings Inc.'s initial public offering priced above the planned range late Thursday, suggesting strong demand for shares of the oil and metals exchange. The IPO of 6.5 million shares priced at $59 each, raising more than $380 million. The pricing came in above the expected range of $54 to $57 a share. The stock is schedule to begin trading on Friday.

Investors who believe they've got fewer choices in the stock market aren't just imagining things. The number of publicly traded and available stocks has plummeted since the Internet bubble of the late 1990s.(US NEWS AND WORLD REPORT)

PUTNAM, Conn. — On the first day the much anticipated PlayStation 3 hit shelves in stores across the country, two armed thugs in Connecticut targeted game seekers with fat wallets, shooting one person waiting in a Wal-Mart line who refused to give up money, authorities said. (FOX NEWS)

Former North Carolina Sen. John Edwards acknowledged Thursday that amid his criticism of Wal-Mart Stores Inc., a volunteer member of his staff asked the world's largest retailer for help obtaining a hot new Sony Playstation 3 for Edwards' family. (AP)

A little noticed phenomenon

Looks like an object in motion stays in motion; for oil prices and inflation that means to the downward trend is intact and for the stock market that means a continued building of the year end rally. This looks to be the beginning of something bigger again I would like to see a broadening out of the advance decline line and a significant increase in the new high /new low numbers .The big signal will be a significant increase in volume that has yet to materialize. Tech have begun to assert them selves for the first time in a while ,with many of the large cap Techs are looking better than they have for some time. Semiconductors are signaling a break out. A little noticed phenomenon that exchange IPO’s have moved up significantly seems to be a very bullish signal for the market in general.

Thursday, November 16, 2006

New New News

Iranian newspapers Kehyan and and Resalat have urged Muslims around the world to prepare for a 'great war' to destroy the State of Israel. The newspapers published the editorials, translated from Persian by MEMRI , the Middle East translation service, to mark 'Quds' day on October 20, an Iranian 'holiday' calling for the "liberation" of Jerusalem and war against Israel. (Yaakov Lappin)

NAIROBI, Kenya (AP) -- Air pollution may be just the thing to fight global warming, some scientists say.Prominent scientists, among them a Nobel laureate, said a layer of pollution deliberately spewed into the atmosphere could act as a "shade" from the sun's rays and help cool the planet.

A man was arrested at Detroit Metropolitan Airport after officials say they found him carrying more than $78,000 in cash and a laptop computer containing information about nuclear materials and cyanide. (AP)

Nov. 16 (Bloomberg) -- Consumer prices in the U.S. fell more than forecast in October, which may reassure Federal Reserve policy makers who last month described inflation as a bigger worry than a slowing economy.

(Bloomberg)``The inflation risk seems to have abated with all this data,'' said James Park, a trader at Rodman & Renshaw Inc. in New York. ``It creates a favorable environment to be invested.''

Nov. 16 (Bloomberg) -- U.S. law enforcement agents seized documents from a broker and subpoenaed at least two insurance companies in a criminal investigation of whether banks and financial firms conspired to rig bids for investment deals with local governments.

Nov. 16 (Bloomberg) -- Shares of KBR Inc., the engineering and government-services arm of oilfield-services provider Halliburton Co., surged 24 percent on their first day of trading.

NEW YORK (MarketWatch) -- Clear Channel Communications Inc., the largest U.S. radio-station owner, on Thursday said it agreed to be sold to an investor group led by private-equity firms Thomas H. Lee Partners and Bain Capital Partners for $18.7 billion in cash.

The value of US Airways planned bid for Delta Air Lines edged towards $9bn on Thursday as investor reaction suggested a belief that the hostile approach could secure backing from creditors and pass regulatory scrutiny.The indicative value of the cash-and-stock-offer made directly to Delta’s unsecured creditors has climbed by almost $1bn since being unveiled on Tuesday, in the wake of opposition from the Atlanta-based carrier’s executives.( Doug Cameron in Chicago,FT)

Dell shares fell after the computer maker said federal regulators had stepped up an investigation into its accounting. Dell said the inquiry would force it to delay reporting quarterly results. (Yahoo Finance)

We have two factions of media in Boston. On the one hand, we have the Hillary-loving, Ted Kennedy apologists. And on the other, we have the liberals. (Mitt Romney)

Wednesday, November 15, 2006


Semiconductors and semi equipment makers are starting to look very positive remember they moved first in the fall of 95 then into the first 1/2 of 96 and the rest is history. They also are very cyclical in nature so you have to buy when P/E’s are high and sell when P/E’s are low. As a sector semi’s often signal a big move in the market. Traditionally they stay flat to down for a very long time, but once they get going its time to jump on. I often tell clients better to buy them on the way up then look for bargains and wait. You could wait a very long time.

Tuesday, November 14, 2006

Who is John Galt ?

November 13, 2006


The next few years should be very interesting as politicians prepare for the 08 elections it looks to be a time for a lot of house cleaning on both parties. Democrats long out of political power have been busy running off a litany of new or some would say old initiatives, but unless you been it, done it, you can’t comment on it. Various forms of celebrations by there supporters have taken place in style including taking hostages. Auto makers and the news media continue to push for nationalized medicine. I don’t know about you but I am not interested in assuming the big 3’s health care burden. I have my doubts however that there is going to be much in the way of policy changes, just a whole lot of electioneering.

On the positive side the momentum seems to be building to relax some of the regulatory burden of Sarbanes-Oxley, but there also now seems to be a significantly less chance that new oil exploration in the US will be allowed which is already beginning to push prices up at the pump. Again I don’t think the new congress will be that much different than the old congress there is simply to many contradictory influences showing them selves in these election results.

Meanwhile the Producer Price Index showed a record drop suggesting inflation is well under control and the bond market is suggesting the FED may cut rates. Either way perhaps the summer economic slow down was just what the Doctor ordered. Frequent readers of this blog will note that I often muse over why Wall Street goes bonkers every summer over a slow down in economic activity when common sense and lots of life experience tells everyone that NO ONE BUYS ANYTHING IN AUGUST . The latest economic data some good and some bad suggests that the demise of the free world will once again be put off to another day.


This message is intended only for the use of the individual or entity to which it is addressed, and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If the reader of this message is not the intended recipient, or the employee or agent responsible for delivering it to the intended recipient, you are hereby notified that reading, disseminating, distributing or copying this communication is strictly prohibited. Investments involve risk, potential loss of principal, volatility, no guarantees.

Thursday, November 09, 2006

the Day After

Does an object in motion stay in motion perhaps or will the Democratic victory bring big changes and derail both the economy and the early stages of this new bull market? The Wall Street wisdom seems to be that grid lock is good, but with such a bunch of whimpy republicans willing to bend over for any body maybe voters have inadvertently created a very activist environment for government intervention in the economy. This would present a significant set back for investors and businesses. This could postpone the current market rally much later in the future. Only time will tell ,talk is just to cheap in DC. I don’t buy any of the analysis; voters seemed to be more interested in punishing Republicans for not acting like Republicans than anything else, that means spending to much money, not securing boarders and too much pussy footing around and apologizing for instead of seriously fighting terror.

Monday, November 06, 2006

IRA Contribution Limits

IRA Contribution Limits






James Foytlin

Horwitz and Associates