Hello,
Look I feel as bad for the Polar Bears as anyone, so I have a simple solution to offer, take advantage of all the snow storms move them all to Denver.
Well it’s the end of the year and its that time for your broker to confess and except his lump of coal for Christmas. Ok so let’s face it this just wasn’t my best year it seemed to be a year that if you didn’t have a big winner your gains could be wiped out by one false step. High risk emerging markets led the way. While Europe continued to out perform in the face of raising rates and real-estate investment trusts did well in the face of vast US real-estate slump. It was a year that often led to out performance and under performance in counter intuitive ways. Many felt global risk increased significantly yet oil and gold sold off. For all the inflation and recession talk consumer spending remained very healthy. Metal prices weakened signaling slowdown but not inflation. Early in the year we were well positioned, but when energy and value gave way to growth stocks most of the portfolios suffered and never regained their mojo.
The year end rally didn’t really materialize and left this market watchers wondering where’s the volume and why is all this cash still sitting on the sidelines. The advance / decline line and the new highs / new low line remained singularly unimpressive. Retail investors continued to bail with mutual fund out flows often out numbering fund inflows. Yes the DOW hit a new high, but this high is only slightly higher than the high of 2000 . By my calculation with an 11% per annum return the DOW should be somewhere around 24000 just to be were it should be. Yes there were a number of doom and gloomer’s looking for and ’87 style melt down but by my calculations, “you can’t fall off the floor”.
As for 2007 I would look for more of the same, merger mania will continue like it did for some time in the early 80’s before the market got a jump start. Perhaps the consolidation of the EU as an economic zone will continue to boost share prices despite higher rates? My bet is your going to see more emerging markets ,but don’t count the US markets out ,its just been too long in the dog house . The consequences of the melt down of 2000 are still with us, so as always just when you lest expect it off to the races we go. Increased bearishness and gloom about the US are defiantly a signal but like the end of the 1970’s early 1980’s it took a long time to get going.
Biggest regrets, well selling HP a bit early it hit my target at 30 and I sold but it kept going. I guess even I underestimated the damage the previous management did. I would have liked to get back in Apple but I thought this executive option scandal was going to kill them, it didn’t .I baled a bit early on some of the exchanges ,I just could justify any price weakness and when I got it for too long I was gone . IAAC got the sell at 39, it hit the mark backed off then rallied to 49, then crashed to the low 20’s .so a bit early. And yes didn’t buy enough Google but winner or not I am still very uncomfortable with that one.
High Lights well despite a great start and a poor finish I did manage to open up 3 times as many accounts as I did last year .Incidentally they came mostly in the last 4 months of the year so I guess I wasn’t the only one having trouble with this market . Another high point was linking up with Elliot Wave International ( http://www.jamesfoytlin.com/about.html ) and I also am now doing mortgages again through Riverview Mortgage in Rutherford . The other big positive was that I renovated my office installed a new phone system and it looks and feels a lot better so please call me to set up an appointment.
Poor Gerry Ford, even in his death he can’t get the timing right. Ex President Fords death grabbed the headlines for what seemed only a matter of minutes when the Godfather of Soul James Brown died a day or so later. The only man to become president without the bother of the campaign was dealt another tuff hand, having to compete with the God Father of Soul’s estate locking his widow out of his mansion at 6am. A star athlete and military hero, member of the Warren Commission and long term congressmen he presided under the shadow of Watergate and just before the malaise of the Carter Years. Ford became President by default when both Richard Nixon and Spiro Agnew left office under separate clouds. His tenure as president was marked by what many have called a “national healing” after Watergate another words he didn’t do anything to piss anyone off. He is known for his “Whip Inflation Now” buttons, a fashion statement that just never caught on. The act he will long be most remembered for and perhaps defines his presidency to most was his pardon of Richard Nixon, which many people with no lives still argue about it to this day. In later years he became more famous for being the longest living ex president. Unlike other ex presidents Gerry Ford managed for the most part to keep his foot out of his mouth, but upon his death a lot has been made of his opposition to the Iraq war believing that more sanctions, like the “oil for fraud” program were the way to go. So a lot will be said of Gerry Ford in the next couple of days but at the end of the day his presidency will be very hard to put a finger on and define. As part of a national day of morning for Gerry Ford the US Equity markets will be closed on Tuesday January 2nd to mark his funeral, so take that James Brown and Happy New Year Everyone!
Finally I just wanted to say that I very much appreciate everyone’s business big and small and I am looking forward to a much improved 2007 .
Happy New Year
James Foytlin
Horwitz and Associates
Toll free 1(866)492-3959
(201)301-2780
Fax (201)301-2762
Cell (201)966-7788
www.jamesfoytlin.com
investment guru
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