January 26,2005
Hello,
Ok, Ok it the worst start for the market since 1982, but what happened in August of 1982? The start of the major bull market that went from 1982 till 2000 producing outsized returns close to 15% a year and pushing the DOW from just under 1000 to over
12000. It gets particularly ugly for the short term investor just prior to the start of the next secular Bull market. Post bubble time periods share many of the same trading phenomenon; first and for most Index Funds tend to underperform the market as the Indexes themselves seem to tread water showing little or no direction. 2nd Momentum investing fails to produce consistent returns and stock pickers out perform. We may have period of lower highs and lower lows punctuated by big short term rallies and longer sell offs. Investors should be using these sell offs to accumulate positions in equities. Once many of the optimists throw in the towel on the market, overwhelming pessimism will signal the beginning of a new super bull market. Look for a big bump up in volume to signal the turn.
The other big issues that has begun to trouble me more and more is the attempt some politicians to tell you how to invest and know what right for you based on after the fact information. As a financial professional I consider it part of my job to protect you and your money from the media, the firms, the industry and yourself, but I am going to add one more group Uncle Sam and his minions of regulators namely at the moment Elliot Spitzer (NY Attorney General). Though Mr .Spitzer has positioned himself as the white night for the small investor and on many issues like getting directors of companies like ENRON to pay up he can not be impugned, but he is going a bit to far when he starts to interfere with the investment process deciding which type of mutual fund pricing structure is right for you. Only you know your particular situation and can weigh the funds pricing structure which best meets your plan and goals and your needs. Mr. Spitzer would be better to spend his time protecting the public from over inflated asset valuations based on false premises ie…political corruption and bad accounting.
And finally despite efforts by terrorist and their allies in the media and in the US Senate to stop the move toward freedom and democracy, Iraq will hold historic elections. People have the right to determine there own destiny. The secret weapon of all democracies is women. Women of Iraq will prevail and vote in great numbers .No mother wants their son or daughter to grow up to be a suicide bomber. The vote of women has done much to destroy the Taliban as a political force and other tyrannies. Women set free to express their voice also brought Japan from an absolute tyranny to the more open global competitor and the ally that it is today. Liberty is calling and the people of Iraq will answer in great numbers. Democracy is a process not an end result. It is not lost on those who defend our freedom that the forces of tyranny and nihilism emanate primarily from the part of the world that has seen the smallest growth in freedom and democracy. While the amount of Democracies in the world has almost doubled in the last 30 years the mid east stands alone in the lack of participation. At the moment Israel is the only representative democracy. What does this all have to do with the stock market? Freedom and Democracy lead to stability, prosperity and peace and in case you missed the last 20 years, that’s good for the stock market!
James
www.jamesfoytlin.com
Sunday, January 30, 2005
Wednesday, January 19, 2005
fortune favors the bold..........
MARKET PERFORMANCE
Year 2004
12/31/03 12/31/04 2004
Close Close Performance
DJIA 10,453.90 10,783.01 Up 3.15%
S&P 500 1,111.92 1,211.92 Up 8.99%
NASDAQ 2,003.37 2,175.44 Up 8.59%
Russell 2000 556.91 651.57 Up 16.99%
January 7, 2004
Hello,
Dan, Dan duck an cover, where are you Dan….when the going got tuff Dan is no where to be found…courage Dan, Courage…So far the January effect has been noticeable absent . Buyers seem disgruntled, while sellers greet each day with glee. Each passing day has given the sellers a new reason to sell. Many of the reasons to sell are met with “myopic zeal”, and most of the reasons seem fallacious and recycled; like there is no political bias at CBS, or smoking gives you cancer, or consumer spending will slow down or most likely it is Roger Ailes fault or Bush or the bloggers or the FED or the budget, trade or some other deficit. Yes folks it is glum and the end is near. The trade deficit continues to grow because our economy is still growing faster than our trading partners. Because consumers are forced to save so much money shopping at wall mart, they continue to spend on new cars and new homes. Things simple could not get any worse. In fact the real “axis of evil” tax cuts, Karl Rove and Halliburton have managed one more awful result, the budget deficit is actually declining. Be very, very quite don’t tell anyone but the tax cuts caused and increase in revenues of 10.5 % while government spending during a war only increased 6.1% .Yes I know the old folks only get free medicine not free booze and mid night basketball was cancelled, but hey we all gotta make sacrifices.
If you’re “tired of the freak show of political pornography”, and are pondering why so often good news gets met with grunts and groans, I have a few ideas as to why the market has clearly lost it’s mojo. First the Iraqi election has the terrorist and their backers (Iran, Syria and others) scrambling to do as much destruction as possible because they know this election will signal the end of the legitimacy of the tyrannies that govern the mid east. Obviously oil facilities are in direct threat and there for so is the fuel that propels the worlds engine. 2nd It is becoming more and more obvious that the “insurgency” in Iraqi is being financed and fueled and fought by outside forces ,except for the remnants of the old Bathest Regime. They have no popular or religious backing what so ever. This implies that these forces will have to be dealt with. Rumors are circulating that Syria may be next and the offensive will come as early as February right after the Iraqi election. 3rd some of our “friends” in the mid east like Saudi Arabia may also oppose a free and independent Iraq. A friendly Iraq will lessen our dependence on their oil and put pressure on others in the mid east to form more open and representative societies.
And finally it seems the cost of the Presidential Inauguration has gotten some peoples skirts up .If the New York Yankees can have a $201 million dollar payroll on a baseball team and the UN can skin at lest 1.4 billion from the oil for food program or better put from the starving mouths of Iraqi children, I hardly think $40 million dollars in private donations is a big deal one way or the other. And what about those gift bags at the Golden Globes, some say they were worth $40 thousand a bag no scaling back there. I need to get out more.
Remember you can “bork” but you can only “bork” so often
James
http://www.jamesfoytlin.com/
http://onesmallvoice.blogspot.com/
10:17 ET 2005 Will Be A Good Year : 2005 is bound to a good year for the stock market. Why? Because all years that end in a "5" have been good years. There is no rational explanation for it, but the years ending in "5" have all been years of positive returns for the stock market. The following table illustrates the total returns of the market, measured by the S&P500 since 1905. (The S&P500 did not exist prior to 1950, the earlier historical returns are reconstructed returns.) (BRIEFING.COM)
Year
Total Return %
1905 7.0
1915 14.0
1925 13.0
1935 46.0
1945 35.7
1955 31.0
1965 12.3
1975 36.9
1985 31.1
1995 34.0
No Guarantee The above trend is more than 100 years old with a 100% accuracy.
Year 2004
12/31/03 12/31/04 2004
Close Close Performance
DJIA 10,453.90 10,783.01 Up 3.15%
S&P 500 1,111.92 1,211.92 Up 8.99%
NASDAQ 2,003.37 2,175.44 Up 8.59%
Russell 2000 556.91 651.57 Up 16.99%
January 7, 2004
Hello,
Dan, Dan duck an cover, where are you Dan….when the going got tuff Dan is no where to be found…courage Dan, Courage…So far the January effect has been noticeable absent . Buyers seem disgruntled, while sellers greet each day with glee. Each passing day has given the sellers a new reason to sell. Many of the reasons to sell are met with “myopic zeal”, and most of the reasons seem fallacious and recycled; like there is no political bias at CBS, or smoking gives you cancer, or consumer spending will slow down or most likely it is Roger Ailes fault or Bush or the bloggers or the FED or the budget, trade or some other deficit. Yes folks it is glum and the end is near. The trade deficit continues to grow because our economy is still growing faster than our trading partners. Because consumers are forced to save so much money shopping at wall mart, they continue to spend on new cars and new homes. Things simple could not get any worse. In fact the real “axis of evil” tax cuts, Karl Rove and Halliburton have managed one more awful result, the budget deficit is actually declining. Be very, very quite don’t tell anyone but the tax cuts caused and increase in revenues of 10.5 % while government spending during a war only increased 6.1% .Yes I know the old folks only get free medicine not free booze and mid night basketball was cancelled, but hey we all gotta make sacrifices.
If you’re “tired of the freak show of political pornography”, and are pondering why so often good news gets met with grunts and groans, I have a few ideas as to why the market has clearly lost it’s mojo. First the Iraqi election has the terrorist and their backers (Iran, Syria and others) scrambling to do as much destruction as possible because they know this election will signal the end of the legitimacy of the tyrannies that govern the mid east. Obviously oil facilities are in direct threat and there for so is the fuel that propels the worlds engine. 2nd It is becoming more and more obvious that the “insurgency” in Iraqi is being financed and fueled and fought by outside forces ,except for the remnants of the old Bathest Regime. They have no popular or religious backing what so ever. This implies that these forces will have to be dealt with. Rumors are circulating that Syria may be next and the offensive will come as early as February right after the Iraqi election. 3rd some of our “friends” in the mid east like Saudi Arabia may also oppose a free and independent Iraq. A friendly Iraq will lessen our dependence on their oil and put pressure on others in the mid east to form more open and representative societies.
And finally it seems the cost of the Presidential Inauguration has gotten some peoples skirts up .If the New York Yankees can have a $201 million dollar payroll on a baseball team and the UN can skin at lest 1.4 billion from the oil for food program or better put from the starving mouths of Iraqi children, I hardly think $40 million dollars in private donations is a big deal one way or the other. And what about those gift bags at the Golden Globes, some say they were worth $40 thousand a bag no scaling back there. I need to get out more.
Remember you can “bork” but you can only “bork” so often
James
http://www.jamesfoytlin.com/
http://onesmallvoice.blogspot.com/
10:17 ET 2005 Will Be A Good Year : 2005 is bound to a good year for the stock market. Why? Because all years that end in a "5" have been good years. There is no rational explanation for it, but the years ending in "5" have all been years of positive returns for the stock market. The following table illustrates the total returns of the market, measured by the S&P500 since 1905. (The S&P500 did not exist prior to 1950, the earlier historical returns are reconstructed returns.) (BRIEFING.COM)
Year
Total Return %
1905 7.0
1915 14.0
1925 13.0
1935 46.0
1945 35.7
1955 31.0
1965 12.3
1975 36.9
1985 31.1
1995 34.0
No Guarantee The above trend is more than 100 years old with a 100% accuracy.
Wednesday, January 05, 2005
stingy......................nuts!
December 27, 2004
Hello,
*First a quick note on the Tsunami: I find it very disgusting that any one would use a tragedy of this magnitude to make cheap political points. Spending and giving someone else’s money is not charity, it is mooching! Since the UN has proven time and time again that they do not have the ability to act decisively in a crisis there is no reason to think that they can contribute anything positive to this crisis. The UN has once again demonstrated their failure of leadership and their failure to act. President Bush has wisely circumvented the UN bureaucracy and skimming machine, delivering aid directly with our allies in Japan, India, Australia and Great Brittan to the areas affected.
Folks this is my year end market letter, so like everyone else I’ll try to pick the winners and the losers, separate the wheat from the chaff and separate the boys from the men. It is a tall order given the markets propensity to make pundits consistently look like fools. Recent moves in the market since the November election only reconfirm my earlier prognostications. Succinctly speaking; the economy will boom and the stock market will zoom. While the nay-sayers in the mainstream media will continue to harp that the end is near, and it is all George Bush’s fault, the reality is far different. Inflations continues to remain under control, interest rates despite raises remain low, consumer spending and housing continue at a brisk pace, energy prices will continue in their fall ,productivity will grow like a weed, payroll employment will continue to increase and new business formation will flourish. Yes, I am very bullish.
So instead of reminiscing about 2004’s have’s and have not’s, winners and losers, the two Americas ,where are the WMD’s, where they aren’t, whose axis of evil anyway, super bowl half times shows, not my president, Grey Davis, Howard Stern, Gay Marriage , the death of a president ,1000 causalities ,too prolif or not, global warming ,global cooling ,graying of snow, the yellowing of snow, the ice caps are melting, Halliburton, FOX/CNN, too Google, old media ,new media, you’re fired, red sox, red states ,blue states or pink states, Jesus land ,massive right wing conspiracy, it’s a quagmire ,to vote or not ,presidential libraries or trailer parks, the Swifties, Mekong delta, war hero for who, and recounts and recounts and recounts oh my……
So if all this leaves you confused , empty and blue (or red) the most important thing to remember are those years ending in 5 always seem to be up! In 1995, the S&P 500 Index was up 34.1 percent. In 1985, the S&P 500 was up 26.3 percent. In 1975, the Index was up 31.5 percent. In 1965, the S&P 500 was up 9.1 percent. In 1955, the S&P 500 was up 26.4 percent and in 1945; the index was up 30.7 percent. I make no promises I am just telling the numbers just the facts mam, just the facts.
Happy New Year and thank you again for all the referrals!
James
I want to say Happy Birthday to our beloved web designer Kristine D Paige (January 2 ….)
http://onesmallvoice.blogspot.com/
http://www.jamesfoytlin.com/
http://www.ridgewoodrepublicanclub.com/
Hello,
*First a quick note on the Tsunami: I find it very disgusting that any one would use a tragedy of this magnitude to make cheap political points. Spending and giving someone else’s money is not charity, it is mooching! Since the UN has proven time and time again that they do not have the ability to act decisively in a crisis there is no reason to think that they can contribute anything positive to this crisis. The UN has once again demonstrated their failure of leadership and their failure to act. President Bush has wisely circumvented the UN bureaucracy and skimming machine, delivering aid directly with our allies in Japan, India, Australia and Great Brittan to the areas affected.
Folks this is my year end market letter, so like everyone else I’ll try to pick the winners and the losers, separate the wheat from the chaff and separate the boys from the men. It is a tall order given the markets propensity to make pundits consistently look like fools. Recent moves in the market since the November election only reconfirm my earlier prognostications. Succinctly speaking; the economy will boom and the stock market will zoom. While the nay-sayers in the mainstream media will continue to harp that the end is near, and it is all George Bush’s fault, the reality is far different. Inflations continues to remain under control, interest rates despite raises remain low, consumer spending and housing continue at a brisk pace, energy prices will continue in their fall ,productivity will grow like a weed, payroll employment will continue to increase and new business formation will flourish. Yes, I am very bullish.
So instead of reminiscing about 2004’s have’s and have not’s, winners and losers, the two Americas ,where are the WMD’s, where they aren’t, whose axis of evil anyway, super bowl half times shows, not my president, Grey Davis, Howard Stern, Gay Marriage , the death of a president ,1000 causalities ,too prolif or not, global warming ,global cooling ,graying of snow, the yellowing of snow, the ice caps are melting, Halliburton, FOX/CNN, too Google, old media ,new media, you’re fired, red sox, red states ,blue states or pink states, Jesus land ,massive right wing conspiracy, it’s a quagmire ,to vote or not ,presidential libraries or trailer parks, the Swifties, Mekong delta, war hero for who, and recounts and recounts and recounts oh my……
So if all this leaves you confused , empty and blue (or red) the most important thing to remember are those years ending in 5 always seem to be up! In 1995, the S&P 500 Index was up 34.1 percent. In 1985, the S&P 500 was up 26.3 percent. In 1975, the Index was up 31.5 percent. In 1965, the S&P 500 was up 9.1 percent. In 1955, the S&P 500 was up 26.4 percent and in 1945; the index was up 30.7 percent. I make no promises I am just telling the numbers just the facts mam, just the facts.
Happy New Year and thank you again for all the referrals!
James
I want to say Happy Birthday to our beloved web designer Kristine D Paige (January 2 ….)
http://onesmallvoice.blogspot.com/
http://www.jamesfoytlin.com/
http://www.ridgewoodrepublicanclub.com/
Sunday, January 02, 2005
you go with the army you have not the army you want
December 16, 2004
Hello,
Today is the 60th anniversary of the battle of the bulge and that brings to mind a few lessons about war. The war in Europe was considered over then out of nowhere in one of the worst winters, with no air cover the Germans attacked with troops they weren’t supposed to have, with equipment they were not supposed to have, to win a war that was considered lost. Our troops were unprepared, our Generals were considered incompetent, our supplies were wrong, our equipment was poor, and our infantry was in short supply. Seems the problem with wars is that the enemy gets in the way of our best laid plans.
By the way the congress approves all military spending, allocates all the money and overseas how the money was spent, and reviews all the intelligence. Criticizing the secretary of defense or anyone else for that matter for congressional failings is a bit offensive. Congress needs to contribute more than ,telling the public to go about your business after 9/11,while they take time off and run home to hide ,but only after giving themselves an other pay raise.
It is office party season, who got invited to what? Did you get invited? Seems the party these days on Wall Street is the erge to merge, Johnson and Johnson eyes Guidant, Nextel courts Sprint, but wait now maybe it is Verizon ,Symantec goes after Veritas and Oracle finally gets with People soft and so it goes. What does all this tell us about the market, seems the big money sees a lot of bargains out there and so should you.
Bernard Kerik recently stepped aside as the Presidents nomination for Home Land Security Czar it seems he is being accused of being involved in a bum Real-estate deal, two extra marital affairs, polygamy, ties to the mob and an undocumented alien nanny, sounds like a good candidate for the next Governor of New Jersey.
Happy Holidays!
James
www.jamesfoytlin.com
Hello,
Today is the 60th anniversary of the battle of the bulge and that brings to mind a few lessons about war. The war in Europe was considered over then out of nowhere in one of the worst winters, with no air cover the Germans attacked with troops they weren’t supposed to have, with equipment they were not supposed to have, to win a war that was considered lost. Our troops were unprepared, our Generals were considered incompetent, our supplies were wrong, our equipment was poor, and our infantry was in short supply. Seems the problem with wars is that the enemy gets in the way of our best laid plans.
By the way the congress approves all military spending, allocates all the money and overseas how the money was spent, and reviews all the intelligence. Criticizing the secretary of defense or anyone else for that matter for congressional failings is a bit offensive. Congress needs to contribute more than ,telling the public to go about your business after 9/11,while they take time off and run home to hide ,but only after giving themselves an other pay raise.
It is office party season, who got invited to what? Did you get invited? Seems the party these days on Wall Street is the erge to merge, Johnson and Johnson eyes Guidant, Nextel courts Sprint, but wait now maybe it is Verizon ,Symantec goes after Veritas and Oracle finally gets with People soft and so it goes. What does all this tell us about the market, seems the big money sees a lot of bargains out there and so should you.
Bernard Kerik recently stepped aside as the Presidents nomination for Home Land Security Czar it seems he is being accused of being involved in a bum Real-estate deal, two extra marital affairs, polygamy, ties to the mob and an undocumented alien nanny, sounds like a good candidate for the next Governor of New Jersey.
Happy Holidays!
James
www.jamesfoytlin.com
Friday, December 10, 2004
"maddeness has the advantage of suprise", Kofi must go now
December 6, 2004
Hello,
Don’t bet the ranch, that’s what the NASD says, the pro’s scale into stock positions over time using the power of dollar cost averaging. Just waiting for the Santa Clause rally, despite the lack of performance of the indexes the market internals continues to trend to the positive. There was a three year period at the end of the 1990’s were indexes out performed ,but now it seems we are back to a more traditional stock pickers market ,were certain stocks and certain sectors significantly out perform. It is very important to use this holiday season to position your self for next year. Year end activities: remember you only pay taxes on realized gains. In theory your account should be up yet you should have realized losses. This time of the year it is a good idea to clean house and sell your losers, especially if you have taken some gains during the year. However I have often found that putting off taking a stock gain for the sole purposes of avoiding taxes leads to folly and perhaps disaster; ask anyone who didn’t sell in December 1999.
One day Sigmund Freud was smoking a very large cigar while lecturing on oral fixation, when questioned by a student on his stogie Dr. Freud responded,” sometimes a cigar is just a cigar”. The reason I bring this up is with the market moving up and down from day to day with all the economic data there is a tendency of some “experts” to assign specific market moves to trivial events of the day .Folks sometimes a cigar is just a cigar meaning, the ebbs and flow of the day to day market moves may have no correlation to the day to day news events what so ever. Even if there is a correlation, correlations in the stock market tend come and go.
This brings us to one more year end pearl of wisdom, “even a broken clock is right twice a day”. With all the reporters, pundits and pollsters seemingly endless speculations on the fate of humanity, state of the economy and laments of moral decline of mankind it is important to keep in mind that no one ever questions them on any inaccurate predictions. The pollster Zogby has even gone as far as to say that his polls were right and it was our vote that was wrong. Why do I bring this up ,well first on wall street no one ever got fired for being to bearish: bearishness protects capital even if it does not make any. Secondly what makes these guys experts anyway after all they are almost always wrong? And finally there is a tendency to see in the numbers and charts what ever you want it to be; if you want oil prices to be higher because your making money of the price raise ,everything you see tells you oil prices will be higher. This gets back to my point ,pundits promote there own self interest not yours ,they can like a broken clock and be accidentally right from time to time, but that does not mean you should not look at what ever they say with great suspicion.
James
www.jamesfoytlin.com
http://www.corporategrowthconcepts.com/
http://onesmallvoice.blogspot.com/
http://www.ridgewoodrepublicanclub.com/index.html
Hello,
Don’t bet the ranch, that’s what the NASD says, the pro’s scale into stock positions over time using the power of dollar cost averaging. Just waiting for the Santa Clause rally, despite the lack of performance of the indexes the market internals continues to trend to the positive. There was a three year period at the end of the 1990’s were indexes out performed ,but now it seems we are back to a more traditional stock pickers market ,were certain stocks and certain sectors significantly out perform. It is very important to use this holiday season to position your self for next year. Year end activities: remember you only pay taxes on realized gains. In theory your account should be up yet you should have realized losses. This time of the year it is a good idea to clean house and sell your losers, especially if you have taken some gains during the year. However I have often found that putting off taking a stock gain for the sole purposes of avoiding taxes leads to folly and perhaps disaster; ask anyone who didn’t sell in December 1999.
One day Sigmund Freud was smoking a very large cigar while lecturing on oral fixation, when questioned by a student on his stogie Dr. Freud responded,” sometimes a cigar is just a cigar”. The reason I bring this up is with the market moving up and down from day to day with all the economic data there is a tendency of some “experts” to assign specific market moves to trivial events of the day .Folks sometimes a cigar is just a cigar meaning, the ebbs and flow of the day to day market moves may have no correlation to the day to day news events what so ever. Even if there is a correlation, correlations in the stock market tend come and go.
This brings us to one more year end pearl of wisdom, “even a broken clock is right twice a day”. With all the reporters, pundits and pollsters seemingly endless speculations on the fate of humanity, state of the economy and laments of moral decline of mankind it is important to keep in mind that no one ever questions them on any inaccurate predictions. The pollster Zogby has even gone as far as to say that his polls were right and it was our vote that was wrong. Why do I bring this up ,well first on wall street no one ever got fired for being to bearish: bearishness protects capital even if it does not make any. Secondly what makes these guys experts anyway after all they are almost always wrong? And finally there is a tendency to see in the numbers and charts what ever you want it to be; if you want oil prices to be higher because your making money of the price raise ,everything you see tells you oil prices will be higher. This gets back to my point ,pundits promote there own self interest not yours ,they can like a broken clock and be accidentally right from time to time, but that does not mean you should not look at what ever they say with great suspicion.
James
www.jamesfoytlin.com
http://www.corporategrowthconcepts.com/
http://onesmallvoice.blogspot.com/
http://www.ridgewoodrepublicanclub.com/index.html
Thursday, December 02, 2004
rather not be rather
December 1, 2004
Hello,
Funny the Saudi’s announce a huge increase in their capacity to produce oil and oil prices raise? Consumers spent money as the expression goes like “drunken sailors”, increasing spending by a whopping 5.1% paying apparently scant attention to the “consumer confidence numbers”. Funny again that real spending has less of am impact on the pundits than consumer confidence polls? Sounds strikingly familiar to something? Wall Street continues to chant the sky is falling, the sky is falling, don’t buy it for one minute! The more the wall of worry keeps increasing the more chances for investors to be rewarded with upside surprises, and strong stock advances.
So why is the dollar really falling in value? The US for decades has been the buyer of last resort for all foreign goods. As a country we seem to have an insatiable appetite. Very good demographics have continued to propel US to consume all that is offered. A strong currency keeps prices and inflation down. Some countries like Japan have horrible demographics and need to export there way to prosperity. Because of Japans success many emerging countries have been encouraged to follow the Japanese model. The problem being that some of these countries like China have huge unmet internal demand making it entirely unnecessary for them to think that they can and should export there way to prosperity. Every country has different population demographics, skills, educational levels and resources. Common sense would suggest to anyone that different countries need differing development policies. Far too many countries are following the same model, keeping the currency cheap, and exporting there way to fame and fortune. There are simply not enough buyers. What we see is market forces attempting to rebalance the value of certain currencies to change the equation. The US can no longer afford to buy everything from everyone. The devaluation of the US dollar will pressure Asia and Europe and force shifts from export driven economies to something more balanced. Asia looks most likely to have a currency crisis while Europe looks most likely to be hurt in the long run.
Now Ridgewoods largest dealer of Iraqi Dinars,
James
Hello,
Funny the Saudi’s announce a huge increase in their capacity to produce oil and oil prices raise? Consumers spent money as the expression goes like “drunken sailors”, increasing spending by a whopping 5.1% paying apparently scant attention to the “consumer confidence numbers”. Funny again that real spending has less of am impact on the pundits than consumer confidence polls? Sounds strikingly familiar to something? Wall Street continues to chant the sky is falling, the sky is falling, don’t buy it for one minute! The more the wall of worry keeps increasing the more chances for investors to be rewarded with upside surprises, and strong stock advances.
So why is the dollar really falling in value? The US for decades has been the buyer of last resort for all foreign goods. As a country we seem to have an insatiable appetite. Very good demographics have continued to propel US to consume all that is offered. A strong currency keeps prices and inflation down. Some countries like Japan have horrible demographics and need to export there way to prosperity. Because of Japans success many emerging countries have been encouraged to follow the Japanese model. The problem being that some of these countries like China have huge unmet internal demand making it entirely unnecessary for them to think that they can and should export there way to prosperity. Every country has different population demographics, skills, educational levels and resources. Common sense would suggest to anyone that different countries need differing development policies. Far too many countries are following the same model, keeping the currency cheap, and exporting there way to fame and fortune. There are simply not enough buyers. What we see is market forces attempting to rebalance the value of certain currencies to change the equation. The US can no longer afford to buy everything from everyone. The devaluation of the US dollar will pressure Asia and Europe and force shifts from export driven economies to something more balanced. Asia looks most likely to have a currency crisis while Europe looks most likely to be hurt in the long run.
Now Ridgewoods largest dealer of Iraqi Dinars,
James
Thursday, November 25, 2004
Where's the camera? Stuff just happens, don't go there Peter ,don't go there
November 22, 2004
Hello Happy Thanksgiving,
OK…What can an out of control fight at an NBA game teach us about investing? Well I guess it pays to have extra security. A new term has been coined an “NBA” moment, but folks don’t think it applies to you and me, you have to make 10 million dollars a year and have a 12 dollar beer thrown on you from a guy sitting in a 3 thousand dollar seat so you too can act like a total irresponsible idiot. And by the way according to the NBA Players Association it is all Bush’s fault anyway. Now that I have cleared that up hey, sh…stuff happens.
So if you’re not making 10 million dollars a year or can’t afford a 3thousand dollar ticket to a game but could afford a 12 dollar beer dollar cost averaging is what it is all about. You may not have the money but you probably have the time. At first it starts up slow and seems like nothing. Over time you can apply the rule of 72; divide any rate of return into the number 72 and the sum gives you the number of years it takes to double your money. So if your return averages 5 % it takes 14.4 years to double your money. It seems long to some but given the fact that Social Security will be bankrupt in less than 20 years it is certainly worth taking a shot and getting going.
Folks investing is more practice, it is doing not talking .Investing is setting a plan and working a plan. For most of us it is more about follow through than about brilliant stock picking. Sure a good stock here and there will your boost returns, but the truth is a couple of mediocre funds or an index fund over time with follow through will breed excellent results. It is all about consistently working the plan, adding money time in and time out.
So what do investors have to be thankful for? Well for one Microsoft is finally going to pay out the 3 bucks, Kmart discovered location, no one raised taxes on dividends, short term capital loses and long term capital gains, tankers ,trucks and trains , just google it but sell it before the lock up ends.
James
Ps. Again thank you for all the referrals!
Hello Happy Thanksgiving,
OK…What can an out of control fight at an NBA game teach us about investing? Well I guess it pays to have extra security. A new term has been coined an “NBA” moment, but folks don’t think it applies to you and me, you have to make 10 million dollars a year and have a 12 dollar beer thrown on you from a guy sitting in a 3 thousand dollar seat so you too can act like a total irresponsible idiot. And by the way according to the NBA Players Association it is all Bush’s fault anyway. Now that I have cleared that up hey, sh…stuff happens.
So if you’re not making 10 million dollars a year or can’t afford a 3thousand dollar ticket to a game but could afford a 12 dollar beer dollar cost averaging is what it is all about. You may not have the money but you probably have the time. At first it starts up slow and seems like nothing. Over time you can apply the rule of 72; divide any rate of return into the number 72 and the sum gives you the number of years it takes to double your money. So if your return averages 5 % it takes 14.4 years to double your money. It seems long to some but given the fact that Social Security will be bankrupt in less than 20 years it is certainly worth taking a shot and getting going.
Folks investing is more practice, it is doing not talking .Investing is setting a plan and working a plan. For most of us it is more about follow through than about brilliant stock picking. Sure a good stock here and there will your boost returns, but the truth is a couple of mediocre funds or an index fund over time with follow through will breed excellent results. It is all about consistently working the plan, adding money time in and time out.
So what do investors have to be thankful for? Well for one Microsoft is finally going to pay out the 3 bucks, Kmart discovered location, no one raised taxes on dividends, short term capital loses and long term capital gains, tankers ,trucks and trains , just google it but sell it before the lock up ends.
James
Ps. Again thank you for all the referrals!
Thursday, November 18, 2004
Rio Bravo..a blue light special and Google
November 17,2004
Hello,
Well it’s not Rio Bravo either, but the market is starting to exude more positives. Compelling valuations that’s what we see and apparently even if some investors are not sold on the value of stock investing; Corporate America has gotten bitten by the merger bug. Dow Jones found value on the internet and Kmart found value in Sears real estate. It is all about location; location, location, location. Speaking of location as you may know I have been cool to this whole “google” thing since its inception. I didn’t like the way the IPO was conducted, I thought the timing of the thing was a day late and a dollar short; I don’t like the capitol structure and I wanted to wait and see for the lock up period to end. Well as you know google doubled in price since the IPO, but recently there has been more criticism of the way the IPO was conducted, including some that suggested that the mishandled road show caused a much lower IPO price leaving a lot of money on the table.
The number of outstanding shares to be freely traded will increase from 22.5 million to a tad fewer than 300 million by February. That is a 10 fold increase! What is a “lock up”? The lock up period is a time period that insiders, original investors, employees and other have to hold stock and are not allowed to trade it freely. Google is not unique in this practice, but the size of the lock up stock compared to the total outstanding stock seems very significant. This is why I remain hands off till I see the lock up end or as they say the “stuff” hits the fan.
Once again inflation has reared it ugly head or has it? Those of you who are regular readers would note that I have constantly swam against the current of the “sky is falling inflation is coming” crowd. Wholesale price increases and consumer price increases have ever so temporary spooked the market again only to be shrugged off one day later. The reason is simple the effects of reflating are not in them selves a trend of inflation. Folks how easily we forget that a little over three years ago we were on a ledge looking straight down at the specter of a deflationary depression. Looking at Japan of the late 1980’s and the Great Depression the FED and the president got together and decided to flood the market with liquidity, with the motto, thanks to P.Diddy “deflate or die”. Recently higher oil prices, which are coming down, a declining dollar and hurricanes displacing the winter food crop, are all contributing to short term price increases. We would need to see several months of data suggesting a consistent uptrend. “Better to devour the data and beware of the dogma”.
James
Hello,
Well it’s not Rio Bravo either, but the market is starting to exude more positives. Compelling valuations that’s what we see and apparently even if some investors are not sold on the value of stock investing; Corporate America has gotten bitten by the merger bug. Dow Jones found value on the internet and Kmart found value in Sears real estate. It is all about location; location, location, location. Speaking of location as you may know I have been cool to this whole “google” thing since its inception. I didn’t like the way the IPO was conducted, I thought the timing of the thing was a day late and a dollar short; I don’t like the capitol structure and I wanted to wait and see for the lock up period to end. Well as you know google doubled in price since the IPO, but recently there has been more criticism of the way the IPO was conducted, including some that suggested that the mishandled road show caused a much lower IPO price leaving a lot of money on the table.
The number of outstanding shares to be freely traded will increase from 22.5 million to a tad fewer than 300 million by February. That is a 10 fold increase! What is a “lock up”? The lock up period is a time period that insiders, original investors, employees and other have to hold stock and are not allowed to trade it freely. Google is not unique in this practice, but the size of the lock up stock compared to the total outstanding stock seems very significant. This is why I remain hands off till I see the lock up end or as they say the “stuff” hits the fan.
Once again inflation has reared it ugly head or has it? Those of you who are regular readers would note that I have constantly swam against the current of the “sky is falling inflation is coming” crowd. Wholesale price increases and consumer price increases have ever so temporary spooked the market again only to be shrugged off one day later. The reason is simple the effects of reflating are not in them selves a trend of inflation. Folks how easily we forget that a little over three years ago we were on a ledge looking straight down at the specter of a deflationary depression. Looking at Japan of the late 1980’s and the Great Depression the FED and the president got together and decided to flood the market with liquidity, with the motto, thanks to P.Diddy “deflate or die”. Recently higher oil prices, which are coming down, a declining dollar and hurricanes displacing the winter food crop, are all contributing to short term price increases. We would need to see several months of data suggesting a consistent uptrend. “Better to devour the data and beware of the dogma”.
James
Thursday, November 11, 2004
sore losers...no flu shot for Santa
November 8, 2004
Hello,
I think the theme of this weeks email is that as investors what we can learn form this year’s Presidential election, is don’t believe your own B.S. Media created truths don’t win elections or make winning portfolios. It is one thing to tell a good story, it is entirely another to believe it yourself. If it makes no sense, it is nonsense. Reality is reality and no amount of agenda driven lying can change it.
So what kinds of stocks look to prosper in the next four years? At the moment many of the same themes look to be intact in the second Bush administration as the first. There are some issues that can be affected by leadership and there are some issues that are consequence of longer term activity. As investors we attempt to separate the two and act accordingly. First there is Security because of continued terrorism, transportation because of a shortage of rolling stock, housing because of demographics and low interest rates .All these sectors point to continuation of the status quo. I would also add that the internet sector which has finally started to do something it had failed to do consistently in the past; make money. And then there is the policy part; more tax cuts, tort reform, interest rate increases, social security private accounts and judgeships. I think it is better to discuss these as they surface.
At times I have found it very frustrating in my efforts to articulate varying levels of risk with different investment selections. The definition of Risk is the issue it seems. It has come to my attention that most novice investors think of risk entirely differently than professionals. To most novice investors risk is simple; if the stock goes up there is no risk and if it goes down there is lots of risk. If they make money there was no risk and if they don’t there was risk. Most novice investors confuse making money in the short term with a level of risk. Folks risk has almost nothing to do with weather you make money or not. Risk is often entirely independent of investment results and entirely independent of short term investment results. Risk is inherent in a particular investment. Risk has many variables. Risk changes with time and circumstances. Risk is often deceptive. Risk is like an Iceberg, the big part is often hidden under the surface. Certain types of investments have more risk than others. Risk is a combination of volatility, consistency and duration, which means most investors, should think of risk as the velocity of which you could lose all or most of your money. A simple rule of thumb is take the time it takes and investment to double and divide that number in half and that’s the time it takes to lose that gain. The shorter the time the greater the risk.
James
www.jamesfoytlin.com
Hello,
I think the theme of this weeks email is that as investors what we can learn form this year’s Presidential election, is don’t believe your own B.S. Media created truths don’t win elections or make winning portfolios. It is one thing to tell a good story, it is entirely another to believe it yourself. If it makes no sense, it is nonsense. Reality is reality and no amount of agenda driven lying can change it.
So what kinds of stocks look to prosper in the next four years? At the moment many of the same themes look to be intact in the second Bush administration as the first. There are some issues that can be affected by leadership and there are some issues that are consequence of longer term activity. As investors we attempt to separate the two and act accordingly. First there is Security because of continued terrorism, transportation because of a shortage of rolling stock, housing because of demographics and low interest rates .All these sectors point to continuation of the status quo. I would also add that the internet sector which has finally started to do something it had failed to do consistently in the past; make money. And then there is the policy part; more tax cuts, tort reform, interest rate increases, social security private accounts and judgeships. I think it is better to discuss these as they surface.
At times I have found it very frustrating in my efforts to articulate varying levels of risk with different investment selections. The definition of Risk is the issue it seems. It has come to my attention that most novice investors think of risk entirely differently than professionals. To most novice investors risk is simple; if the stock goes up there is no risk and if it goes down there is lots of risk. If they make money there was no risk and if they don’t there was risk. Most novice investors confuse making money in the short term with a level of risk. Folks risk has almost nothing to do with weather you make money or not. Risk is often entirely independent of investment results and entirely independent of short term investment results. Risk is inherent in a particular investment. Risk has many variables. Risk changes with time and circumstances. Risk is often deceptive. Risk is like an Iceberg, the big part is often hidden under the surface. Certain types of investments have more risk than others. Risk is a combination of volatility, consistency and duration, which means most investors, should think of risk as the velocity of which you could lose all or most of your money. A simple rule of thumb is take the time it takes and investment to double and divide that number in half and that’s the time it takes to lose that gain. The shorter the time the greater the risk.
James
www.jamesfoytlin.com
Thursday, November 04, 2004
he's back......but america was not "cowed"
November 3,2004
Hello,
They are all back, President Bush is back, Bill Clinton is back, Bin Laden is back. And Hillary is coming back oh my.
Well it is over, yes it really is over including the shouting. Everyone should be proud of them selves, the American people have spoken. Someone asked me if I was happy because my guy won? Remember I am a Yankee fan, so as a Yankee fan I always expect to win. It doesn’t mean I feel entitled to win , “winning” is just a state of mind .You work hard ,do what it takes ,learn from your mistakes and just win baby just win. So all and all I am more or less, “satisfied” with the out come and would say of coarse my guy won I never expected anything else.
So who are the big winners? The American people; for turning out in record numbers to vote and having a good time doing it. George Bush; for getting elected by the largest number of voters in US history. The Republican Party; for picking up even more control of congress. The people of Afghanistan and Iraq ;for getting the full support of the American electorate. The US Military for totally kicking arse. Karl Rove; for making all his detractors look stupid, again. Dick Cheney; for delivering the three electoral votes from Wyoming. Halliburton , because you love to hate them and now you get four more years of fun doing it. Hezbollah; for a successful distribution of Fahrenheit 9/11 thru the Muslim world. Michael Moore; for becoming the most quoted source of international terrorism. John Kerry ;for being the first man to give successful mouth to mouth to a hamster. Theresa Heinz Kerry; for inventing a new cure for arthritis. The Bush twins; for a successful start in the world of public speaking. The “new media” ;for getting so much of this thing right most of the time. Hilary Clinton ;because 2008 is only four years away. Stem cell researchers; for conning California Tax payers out of over 3 billion dollars to do totally bogus research and finally the Boston Red Sox because I simply cant believe they won the World Series and the world didn’t come to an end.
Losing I am afraid is also a state of mind ask any Mets fan. So who are the big losers? Well I bet a lot of pollsters will be searching for new career options. The mainstream media for looking totally clueless, losing all shreds of credibility and by the end got found out for the partisan hacks that they really are. The Democratic Party; which is in a severe state of decline. George Soros; for his failed very expensive bid to buy the US government. Global Elitists of all ilk’s, you know who you are, looking like idiots and we wont forget there follies. John Edwards ;who gave up his Senate seat to become and unemployed trial lawyer ,who often sounds like Forest Gump. Bin laden for backing a loser. Islamofacists; for not realizing President Bush will never campaign again and there for is free to do what ever it takes the next four years. The UN and it policies to promote terrorism, tyranny and global criminality. Hollywood ;for reminding us that beauty is only skin deep and finally Bruce Springsteen ;for reminding us why there are all those jokes about New Jersey.
Finally I just want to say that with the election behind us and a diminished threat of terrorism at home ,a decline in oil prices, a robust economy and a depressed stock market are a recipe for a big upside move in the market in the final days of 2004.
James
Ps thank you again for all the referrals I very much appreciate the new business…….
Hello,
They are all back, President Bush is back, Bill Clinton is back, Bin Laden is back. And Hillary is coming back oh my.
Well it is over, yes it really is over including the shouting. Everyone should be proud of them selves, the American people have spoken. Someone asked me if I was happy because my guy won? Remember I am a Yankee fan, so as a Yankee fan I always expect to win. It doesn’t mean I feel entitled to win , “winning” is just a state of mind .You work hard ,do what it takes ,learn from your mistakes and just win baby just win. So all and all I am more or less, “satisfied” with the out come and would say of coarse my guy won I never expected anything else.
So who are the big winners? The American people; for turning out in record numbers to vote and having a good time doing it. George Bush; for getting elected by the largest number of voters in US history. The Republican Party; for picking up even more control of congress. The people of Afghanistan and Iraq ;for getting the full support of the American electorate. The US Military for totally kicking arse. Karl Rove; for making all his detractors look stupid, again. Dick Cheney; for delivering the three electoral votes from Wyoming. Halliburton , because you love to hate them and now you get four more years of fun doing it. Hezbollah; for a successful distribution of Fahrenheit 9/11 thru the Muslim world. Michael Moore; for becoming the most quoted source of international terrorism. John Kerry ;for being the first man to give successful mouth to mouth to a hamster. Theresa Heinz Kerry; for inventing a new cure for arthritis. The Bush twins; for a successful start in the world of public speaking. The “new media” ;for getting so much of this thing right most of the time. Hilary Clinton ;because 2008 is only four years away. Stem cell researchers; for conning California Tax payers out of over 3 billion dollars to do totally bogus research and finally the Boston Red Sox because I simply cant believe they won the World Series and the world didn’t come to an end.
Losing I am afraid is also a state of mind ask any Mets fan. So who are the big losers? Well I bet a lot of pollsters will be searching for new career options. The mainstream media for looking totally clueless, losing all shreds of credibility and by the end got found out for the partisan hacks that they really are. The Democratic Party; which is in a severe state of decline. George Soros; for his failed very expensive bid to buy the US government. Global Elitists of all ilk’s, you know who you are, looking like idiots and we wont forget there follies. John Edwards ;who gave up his Senate seat to become and unemployed trial lawyer ,who often sounds like Forest Gump. Bin laden for backing a loser. Islamofacists; for not realizing President Bush will never campaign again and there for is free to do what ever it takes the next four years. The UN and it policies to promote terrorism, tyranny and global criminality. Hollywood ;for reminding us that beauty is only skin deep and finally Bruce Springsteen ;for reminding us why there are all those jokes about New Jersey.
Finally I just want to say that with the election behind us and a diminished threat of terrorism at home ,a decline in oil prices, a robust economy and a depressed stock market are a recipe for a big upside move in the market in the final days of 2004.
James
Ps thank you again for all the referrals I very much appreciate the new business…….
Friday, October 29, 2004
lipstick on a pig..I got a plan...Red Sox win...end of the John Peel show
October 28, 2004
Hello,
Did you say thirty thousands of bananas’s, or was it 380 tons of explosives or maybe 3.8 tons well what ever the story is today.
Folks incase you haven’t done the math it would take 100 men with 38 trucks working 12 hours a day two weeks to move 380 tons of explosives ,mind you in the middle of a war . Sounds reasonable to be handling explosives for 12 hours while being shot at doesn’t it? Funny that no one is worried about what happened to the WMD’s. If the terrorist in Iraq had all these weapons why haven’t they used them? Doesn’t this claim also support the President claim that Iraq was a serious and gathering threat? I am simple amazed at the total ridiculousness of this story. It gets even sillier with each passing day. You would think members of the mainstream media would have learned something form the Dan Rather fraud documents scandal. Yet, they continue to harp on something that is blatantly false and logically makes no sense what so ever.
The story originated from the UN director of the IAEA, Mohammed el-Baradei, Hans Blix’s boss. He sent a letter to the New York Times making the accusations in an attempt to cover his own arse. The IAEA has missed many major weapons stock piles including some in North Korea, Iran, Libya, and Iraq. The stock piles at al-Qaqaa were the responsibility of the UN and as usual the UN failed in that responsibility. Mohammed el-Baradei is considered inept at best, fostering global criminality and nuclear proliferation at worst.
This brings me to my next point; the oil for food scandal makes it clear that members of the Security Council were paid off thru the oil for food program by Saddam Hussien to oppose the war. France sold their vote on the Security Council for a mere $1.7 billion. Apparently they have joined forces once again with their allies in the mainstream US press and the Kerry campaign to defeat President Bush. Add George Soros a known commodities and currency trader, a man clearly trying to buy the presidency to the mix and it is no wonder that oil prices have suddenly moved so high so fast. My prediction oil prices will begin to plummet on Election Day.
Why so much about politics because as investors we only know what we have and we don’t know what we don’t have. After the fact anybody can say what we should have done. Investment needs a certain level of certainty and because of the environment this certainty has been missing. On November 2 we are going to move one step closer to that certainty and gain a clearer picture of what steps to take the next couple of years.
Alright finally, congratulations the Red Sox made it look easy; they win it all first time since 1918. Perhaps credit the lunar eclipse with breaking the curse or maybe there never was a curse at all, maybe they just always sucked? Don’t think of it as a good omen for Senator Kerry however, as Boston Red Sox star pitcher Kurt Schilling said it best in an interview with Charley Gibson on Good Morning America urged everyone to go out and vote on November 2 and go out and vote for Bush!
Investors have to be careful out there, it is a dangerous world,
James
Hello,
Did you say thirty thousands of bananas’s, or was it 380 tons of explosives or maybe 3.8 tons well what ever the story is today.
Folks incase you haven’t done the math it would take 100 men with 38 trucks working 12 hours a day two weeks to move 380 tons of explosives ,mind you in the middle of a war . Sounds reasonable to be handling explosives for 12 hours while being shot at doesn’t it? Funny that no one is worried about what happened to the WMD’s. If the terrorist in Iraq had all these weapons why haven’t they used them? Doesn’t this claim also support the President claim that Iraq was a serious and gathering threat? I am simple amazed at the total ridiculousness of this story. It gets even sillier with each passing day. You would think members of the mainstream media would have learned something form the Dan Rather fraud documents scandal. Yet, they continue to harp on something that is blatantly false and logically makes no sense what so ever.
The story originated from the UN director of the IAEA, Mohammed el-Baradei, Hans Blix’s boss. He sent a letter to the New York Times making the accusations in an attempt to cover his own arse. The IAEA has missed many major weapons stock piles including some in North Korea, Iran, Libya, and Iraq. The stock piles at al-Qaqaa were the responsibility of the UN and as usual the UN failed in that responsibility. Mohammed el-Baradei is considered inept at best, fostering global criminality and nuclear proliferation at worst.
This brings me to my next point; the oil for food scandal makes it clear that members of the Security Council were paid off thru the oil for food program by Saddam Hussien to oppose the war. France sold their vote on the Security Council for a mere $1.7 billion. Apparently they have joined forces once again with their allies in the mainstream US press and the Kerry campaign to defeat President Bush. Add George Soros a known commodities and currency trader, a man clearly trying to buy the presidency to the mix and it is no wonder that oil prices have suddenly moved so high so fast. My prediction oil prices will begin to plummet on Election Day.
Why so much about politics because as investors we only know what we have and we don’t know what we don’t have. After the fact anybody can say what we should have done. Investment needs a certain level of certainty and because of the environment this certainty has been missing. On November 2 we are going to move one step closer to that certainty and gain a clearer picture of what steps to take the next couple of years.
Alright finally, congratulations the Red Sox made it look easy; they win it all first time since 1918. Perhaps credit the lunar eclipse with breaking the curse or maybe there never was a curse at all, maybe they just always sucked? Don’t think of it as a good omen for Senator Kerry however, as Boston Red Sox star pitcher Kurt Schilling said it best in an interview with Charley Gibson on Good Morning America urged everyone to go out and vote on November 2 and go out and vote for Bush!
Investors have to be careful out there, it is a dangerous world,
James
Monday, October 25, 2004
No Sleep till Victory!...maybe we all need to get a real job...Godzilla turns 50!
October 21, 2004
Hello,
Alright, alright I know the Red Sox won, remember they still have to win the World Series to break the curse of the bambino, and destroy the world. If the curse holds and the calendar is correct history tells us we have entered the seasonally favorable time of the year for investors. This period runs from the end of October to beginning of April, of coarse if the Red Sox win the World Series all bets are off.
So now we all know that according to Teresa Heinz Kerry that a real job is marrying a very rich man, and giving away money you never earned to a bunch of people how don’t deserve it….but being a school teacher in Texas is not. Apparently Teresa Heinz Kerry is referring to something similar to the world’s oldest profession as her profession.
Folks the Clintons Nationalized the production of flu Vaccine, with out nationalizing the cost of litigation. Without the proper profit margin and with added risk of lawsuits there is no incentive for Vaccine production. Vaccine production in the US dropped from 33 producers to 1 under the Clinton care arrangements.
On an interesting note Godzilla, the over grown Japanese lizard is 50 years old this month. Many investors already have been squished by Godzilla market the last several years. What is the Godzilla market? The Godzilla market is the dot com turns to dot bomb, corporate scandals, terrorism, higher oil prices, increasing interest rates, deflation, natural disasters and political uncertainty, like I said the only thing worse than this would be the Red Sox winning the World Series.
Why does the dollar continue to decline and what does it really mean? It seems the central diatribe of the mainstream media is that our economy is bad, there is too much debt, and Bush is hated. The mainstream media has pronounced the declining dollar to be symptomatic with failure, sounds rather ominous. The reality is far different. The declining dollar is more a symptom of low interest rates. Yes I know interest rates have been boosted by the FED, but they are still relatively low in historical terms. In fact long term rates have declined somewhat this year even with the FED raising rates. Because of the enormous stock market decline during the final year of the Clinton administration, The FED in 2000 was forced to flood the US economy with cheap money in an effort to stem the deflationary spiral that was beginning to take hold. Not wanting to repeat the mistakes of the past, Chairman Greenspan made the wise move to excessive easy credit. Unlike the 1930’s were raising rates and raising taxes started the(deflationary spiral)Great Depression or as Japan did in the late 1980’s also raising taxes and raising interest rates to defend their currency and their budget surplus. These actions pushed Japan over the edge into a deep deflationary spiral which they are still currently looking to escape. So low interest rates, tax cuts and printing money have contributed to a decline in the over valued dollar in an effort to fight off deflation. The decline in the dollar also makes the US manufacturing more competitive and there by threatens to undermine Europe’s exports, which the EU is highly dependent on. The weakness or strength in a currency is seldom a moral judgment it is simply a pricing mechanism of countries competitiveness, demographics, resources, economic cycle and so on.
James
Hello,
Alright, alright I know the Red Sox won, remember they still have to win the World Series to break the curse of the bambino, and destroy the world. If the curse holds and the calendar is correct history tells us we have entered the seasonally favorable time of the year for investors. This period runs from the end of October to beginning of April, of coarse if the Red Sox win the World Series all bets are off.
So now we all know that according to Teresa Heinz Kerry that a real job is marrying a very rich man, and giving away money you never earned to a bunch of people how don’t deserve it….but being a school teacher in Texas is not. Apparently Teresa Heinz Kerry is referring to something similar to the world’s oldest profession as her profession.
Folks the Clintons Nationalized the production of flu Vaccine, with out nationalizing the cost of litigation. Without the proper profit margin and with added risk of lawsuits there is no incentive for Vaccine production. Vaccine production in the US dropped from 33 producers to 1 under the Clinton care arrangements.
On an interesting note Godzilla, the over grown Japanese lizard is 50 years old this month. Many investors already have been squished by Godzilla market the last several years. What is the Godzilla market? The Godzilla market is the dot com turns to dot bomb, corporate scandals, terrorism, higher oil prices, increasing interest rates, deflation, natural disasters and political uncertainty, like I said the only thing worse than this would be the Red Sox winning the World Series.
Why does the dollar continue to decline and what does it really mean? It seems the central diatribe of the mainstream media is that our economy is bad, there is too much debt, and Bush is hated. The mainstream media has pronounced the declining dollar to be symptomatic with failure, sounds rather ominous. The reality is far different. The declining dollar is more a symptom of low interest rates. Yes I know interest rates have been boosted by the FED, but they are still relatively low in historical terms. In fact long term rates have declined somewhat this year even with the FED raising rates. Because of the enormous stock market decline during the final year of the Clinton administration, The FED in 2000 was forced to flood the US economy with cheap money in an effort to stem the deflationary spiral that was beginning to take hold. Not wanting to repeat the mistakes of the past, Chairman Greenspan made the wise move to excessive easy credit. Unlike the 1930’s were raising rates and raising taxes started the(deflationary spiral)Great Depression or as Japan did in the late 1980’s also raising taxes and raising interest rates to defend their currency and their budget surplus. These actions pushed Japan over the edge into a deep deflationary spiral which they are still currently looking to escape. So low interest rates, tax cuts and printing money have contributed to a decline in the over valued dollar in an effort to fight off deflation. The decline in the dollar also makes the US manufacturing more competitive and there by threatens to undermine Europe’s exports, which the EU is highly dependent on. The weakness or strength in a currency is seldom a moral judgment it is simply a pricing mechanism of countries competitiveness, demographics, resources, economic cycle and so on.
James
Wednesday, October 20, 2004
who's your dady?
October 19,2004
Hello,
The market continues to push upward with intermittent periods of sharp selling, giving investors opportunities to get on board. Weather it is higher oil prices, earth quakes or government investigations of the insurance industries every couple of days the market seems to take a hit. When it looks bleakest the market then reverses to the up side. Day by day the economic data taken out of context seems to contradict it self. So for this email I am going to try to put some of the data in perspective.
As I have stated before the mainstream media and much of the business media have very much mischaracterized most of what has been going on in the economy. What I think has been very much misunderstood is the continued move in America to an ownership society. Here are some of the economic basics of our time;
According to the Cato Institute 68.6% of all American households own their own home which is an all time record high and some like John Kerry own five. There are many factors that create this environment among them low interest rates, tax cuts, and demographics. Most economists would agree that this is probably one of the best measures of the vitality of the middle class.
Even with the poor stock market environment since March 2000, the investor class now makes up over 50% of US households. That is up from 32% in 1989 and 19% in 1983.
So you ask what about jobs? According to the payroll Data since President Bush has been in office there is a decline of about 900,000, working for someone else(that’s payroll data) ,but household working survey shows an increase of 1.8 million jobs since January 2001(that’s working for yourself or someone else) . Again I think the wide spread use of technology is fundamentally changing the way we work and live, challenging our ability to measure changes in the economy. After all people like me are not showing up on the payroll survey yet the fact is I am working. The four week moving average for new unemployment claims is 348,500, less that the 25 year moving average of 380,520. Even the decline in labor force participation from 67.2 to 66 % which is almost exclusively do to the sudden lack of 16-19 years olds willing to work. The US will outsource about 3.5 million jobs from 2000 -2015; meanwhile there are currently 5.4 million jobs that have been in sourced.
What about manufacturing jobs? There has been and 11% decrease in manufacturing jobs in the US and world wide from 1995 -2002. China has had a 15% decrease in manufacturing jobs during the same period. This is primarily due too increases in productivity. Of late the US has seen a serious rebound in manufacturing activity and a slight rebound in manufacturing jobs.
Real earnings have continued to increase at 2% per year even during the 2000-2001 recession. Real earnings are higher now than at the height of the “dot.com” craze. This is entirely different than past recessions were real earning declined such as 1980-82, or 1990-91.
Real GDP growth is running about 3.3%, slightly above the 1990’s of 3.26%. The Poverty rate has reached 12.5%, up but below the 1998 rate of 12.7%.the recent raise in Child Poverty (1.6%) has been significantly below the raise in the past recessions of 1980 (5.5%) or 1990(2.7%).1/2 of all Poverty lasts less than 4 months and 80% of people in Poverty are out of Poverty in less than one year. 80.4% of all Americans had health insurance, up from 78.2 in 1996.
James
Hello,
The market continues to push upward with intermittent periods of sharp selling, giving investors opportunities to get on board. Weather it is higher oil prices, earth quakes or government investigations of the insurance industries every couple of days the market seems to take a hit. When it looks bleakest the market then reverses to the up side. Day by day the economic data taken out of context seems to contradict it self. So for this email I am going to try to put some of the data in perspective.
As I have stated before the mainstream media and much of the business media have very much mischaracterized most of what has been going on in the economy. What I think has been very much misunderstood is the continued move in America to an ownership society. Here are some of the economic basics of our time;
According to the Cato Institute 68.6% of all American households own their own home which is an all time record high and some like John Kerry own five. There are many factors that create this environment among them low interest rates, tax cuts, and demographics. Most economists would agree that this is probably one of the best measures of the vitality of the middle class.
Even with the poor stock market environment since March 2000, the investor class now makes up over 50% of US households. That is up from 32% in 1989 and 19% in 1983.
So you ask what about jobs? According to the payroll Data since President Bush has been in office there is a decline of about 900,000, working for someone else(that’s payroll data) ,but household working survey shows an increase of 1.8 million jobs since January 2001(that’s working for yourself or someone else) . Again I think the wide spread use of technology is fundamentally changing the way we work and live, challenging our ability to measure changes in the economy. After all people like me are not showing up on the payroll survey yet the fact is I am working. The four week moving average for new unemployment claims is 348,500, less that the 25 year moving average of 380,520. Even the decline in labor force participation from 67.2 to 66 % which is almost exclusively do to the sudden lack of 16-19 years olds willing to work. The US will outsource about 3.5 million jobs from 2000 -2015; meanwhile there are currently 5.4 million jobs that have been in sourced.
What about manufacturing jobs? There has been and 11% decrease in manufacturing jobs in the US and world wide from 1995 -2002. China has had a 15% decrease in manufacturing jobs during the same period. This is primarily due too increases in productivity. Of late the US has seen a serious rebound in manufacturing activity and a slight rebound in manufacturing jobs.
Real earnings have continued to increase at 2% per year even during the 2000-2001 recession. Real earnings are higher now than at the height of the “dot.com” craze. This is entirely different than past recessions were real earning declined such as 1980-82, or 1990-91.
Real GDP growth is running about 3.3%, slightly above the 1990’s of 3.26%. The Poverty rate has reached 12.5%, up but below the 1998 rate of 12.7%.the recent raise in Child Poverty (1.6%) has been significantly below the raise in the past recessions of 1980 (5.5%) or 1990(2.7%).1/2 of all Poverty lasts less than 4 months and 80% of people in Poverty are out of Poverty in less than one year. 80.4% of all Americans had health insurance, up from 78.2 in 1996.
James
Monday, October 11, 2004
sex orgies...rocket man and no respect
MARKET PERFORMANCE
Year to Date 2004
12/31/03 09/30/04 YTD 2004
Close Close Performance
DJIA 10,453.90 10,080.27 Down 3.57%
S&P 500 1,111.92 1,114.58 Up .24%
NASDAQ 2,003.37 1,896.84 Down 5.32%
Russell 2000 556.91 572.94 Up 2.88%
October 10th 2004
Hello,
Recently one of Wall Streets biggest technical analysts called for a prolonged bear market, kind of like jumping out of plane that already hit the ground. My view is still that short term impediments of global insecurity will eventually be over whelmed by good fundamentals and a growing economy. Years of technology investment are paying off with bigger and bigger increases productivity growth, enabling even the most technologically inept, to easily access quality of life enhancing technologies.
Does anyone think the coverage of the Mt St Helens volcano is a bit silly, are those camera men really going to sit there until it erupts? Unless it erupts soon I don’t think that is going to be a good career move. This market is like watching Mt St Helens .We all know something is going to happen it is simply a matter of when. Another words what will be the catalytic event that will get the market going in a positive direction in a big way?
We are entering the seasonally favorable time of the year, the middle of October till the ides of April. Usually the market makes some kind of a low by the 3rd week of October then on que uncertainty begins to lift and we are off to the races. The last several years the October to April sweet spot has been noticeable absent. The recent strength in the market coupled with an explosion to the upside of the transportation sector implies that the seasonally favorable time of the year may have resumed. The markets have continued to rally recently in the face of higher oil prices, terrorism, nuclear proliferation, beheadings, prison atrocities, debates, hurricanes, volcanoes and earthquakes. What has become noticeable is that counter cyclical stocks such as energy issues have often rallied along side of traditional growth stocks.
The “NET” is back. In the last couple of months many on the larger high quality internet stocks have not only show good profit growth but also some nice moves in their stocks prices. It seems the advertisers are back and much of the sticky pay for content is sticking and getting paid for. Personnel ads, traditional classified, travel, special news services, online shopping and job ads have begun to go mainstream. Advertisers are beginning to dig the “pay for click “format.
James
Year to Date 2004
12/31/03 09/30/04 YTD 2004
Close Close Performance
DJIA 10,453.90 10,080.27 Down 3.57%
S&P 500 1,111.92 1,114.58 Up .24%
NASDAQ 2,003.37 1,896.84 Down 5.32%
Russell 2000 556.91 572.94 Up 2.88%
October 10th 2004
Hello,
Recently one of Wall Streets biggest technical analysts called for a prolonged bear market, kind of like jumping out of plane that already hit the ground. My view is still that short term impediments of global insecurity will eventually be over whelmed by good fundamentals and a growing economy. Years of technology investment are paying off with bigger and bigger increases productivity growth, enabling even the most technologically inept, to easily access quality of life enhancing technologies.
Does anyone think the coverage of the Mt St Helens volcano is a bit silly, are those camera men really going to sit there until it erupts? Unless it erupts soon I don’t think that is going to be a good career move. This market is like watching Mt St Helens .We all know something is going to happen it is simply a matter of when. Another words what will be the catalytic event that will get the market going in a positive direction in a big way?
We are entering the seasonally favorable time of the year, the middle of October till the ides of April. Usually the market makes some kind of a low by the 3rd week of October then on que uncertainty begins to lift and we are off to the races. The last several years the October to April sweet spot has been noticeable absent. The recent strength in the market coupled with an explosion to the upside of the transportation sector implies that the seasonally favorable time of the year may have resumed. The markets have continued to rally recently in the face of higher oil prices, terrorism, nuclear proliferation, beheadings, prison atrocities, debates, hurricanes, volcanoes and earthquakes. What has become noticeable is that counter cyclical stocks such as energy issues have often rallied along side of traditional growth stocks.
The “NET” is back. In the last couple of months many on the larger high quality internet stocks have not only show good profit growth but also some nice moves in their stocks prices. It seems the advertisers are back and much of the sticky pay for content is sticking and getting paid for. Personnel ads, traditional classified, travel, special news services, online shopping and job ads have begun to go mainstream. Advertisers are beginning to dig the “pay for click “format.
James
Thursday, September 30, 2004
Elvis will be spotted before the election.......
Stock Market basics…..
According to data from Ibbotson Associates Inc., large-company stocks returned 10.4 percent a year from 1925 through 2003 -- almost twice the 5.4 percent annual return for government bonds, and almost three times the 3.6 percent return for short-term Treasury bills. Inflation came in at 3 percent a year. (Bloomberg)
In the last five calendar years, the Standard & Poor's 500 Index has been up 19.5 percent; down 10.1 percent, down 13 percent; down 23.4 percent, and up 26.4 percent. (Bloomberg)
In the woebegone 1970s, for instance, when the index suffered back-to-back declines of 17.4 percent in 1973 and 29.7 percent in 1974, it still finished the decade with a total return, including dividends, of 5.8 percent per year. (Bloomberg)
September 28th ,2004
Hello,
Jimmy Carter the hero and friend of villains and tyrannies all over the world and considered by many the most ineffectual president in the 20th century. No one is more a symbol of worshiping failure and ineptitude than Jimmy Carter. He institutionalized incompetence in the late 1970’s.Creator of the1970’s energy crisis and the accompanied malaise, certifier of all elections involving global criminality such as Jean Paul Aristide (Haiti), Fidel Castro (Cuba) and Hugo Chaves (Venezuela) amongst many. Perhaps his crowning achievement was the founding of a fundamentalist fascist Islamic state in Iran. Now Jimmy Carter has joined the ranks of al Quada in an attempt to undermine the 2004 election. His primary complaint is that is that felons in Florida are being disenfranchised and not being able to exercise the right to vote, don’t get any ideas McGreevey. No Jimmy felons can get elected but they cant vote, they lose that right when they fail to function in a social expectable manner or to quote Teresa Heinz Kerry , “ (act like a) scum bag” . But as you know Jimmy they can certainly run for office. Actually running for office is one of the few jobs you can get after a stint in the big house. I am getting more than a little board with someone who takes pride in, denying self determination to the masses and lending legitimacy to every too bit dictator in the world ,who’s only qualification is to be anti-American in the name of peace, love and understanding.
Back to the market, my thoughts are simple, with the US election looming and perhaps even more importantly the Iraqi election, and Afghanistan elections. Free elections in the mid east would be a near fatal blow to extremism. The Islamic extremists will do any thing to disrupt them. Add Iran’s ability to shot a nuclear missile perhaps into Europe and North Koreas lust to turn Japan into a nuclear waste land. Fear and War will dominate the market which puts a premium on Energy related issues and Defense issues. I know the large cap defense issues have been a bit of a bust, but smaller more focused issues have done quite well. In the long run I still view this oil thing as a bubble. Short term oil will continue to gain on a growing risk premium with the center of the battle shifting from Iraq to Iran. I did not think this new shift was going to hit so hard so fast. In the long run I still view this oil thing as a bubble. Remember higher prices encourage conservation and conservation becomes permanent. Conservation has a long term impact. OPEC is pumping the most in oil in 25 years. Oil often peaks in price in October. The world is much less dependant on oil than it once was. Remember oil would have to go to $100 per barrel to be were it was in real dollars in 1980.Anyway a lot of things look to be coming to a head in the next month to month and a half, so be careful out there.
James
According to data from Ibbotson Associates Inc., large-company stocks returned 10.4 percent a year from 1925 through 2003 -- almost twice the 5.4 percent annual return for government bonds, and almost three times the 3.6 percent return for short-term Treasury bills. Inflation came in at 3 percent a year. (Bloomberg)
In the last five calendar years, the Standard & Poor's 500 Index has been up 19.5 percent; down 10.1 percent, down 13 percent; down 23.4 percent, and up 26.4 percent. (Bloomberg)
In the woebegone 1970s, for instance, when the index suffered back-to-back declines of 17.4 percent in 1973 and 29.7 percent in 1974, it still finished the decade with a total return, including dividends, of 5.8 percent per year. (Bloomberg)
September 28th ,2004
Hello,
Jimmy Carter the hero and friend of villains and tyrannies all over the world and considered by many the most ineffectual president in the 20th century. No one is more a symbol of worshiping failure and ineptitude than Jimmy Carter. He institutionalized incompetence in the late 1970’s.Creator of the1970’s energy crisis and the accompanied malaise, certifier of all elections involving global criminality such as Jean Paul Aristide (Haiti), Fidel Castro (Cuba) and Hugo Chaves (Venezuela) amongst many. Perhaps his crowning achievement was the founding of a fundamentalist fascist Islamic state in Iran. Now Jimmy Carter has joined the ranks of al Quada in an attempt to undermine the 2004 election. His primary complaint is that is that felons in Florida are being disenfranchised and not being able to exercise the right to vote, don’t get any ideas McGreevey. No Jimmy felons can get elected but they cant vote, they lose that right when they fail to function in a social expectable manner or to quote Teresa Heinz Kerry , “ (act like a) scum bag” . But as you know Jimmy they can certainly run for office. Actually running for office is one of the few jobs you can get after a stint in the big house. I am getting more than a little board with someone who takes pride in, denying self determination to the masses and lending legitimacy to every too bit dictator in the world ,who’s only qualification is to be anti-American in the name of peace, love and understanding.
Back to the market, my thoughts are simple, with the US election looming and perhaps even more importantly the Iraqi election, and Afghanistan elections. Free elections in the mid east would be a near fatal blow to extremism. The Islamic extremists will do any thing to disrupt them. Add Iran’s ability to shot a nuclear missile perhaps into Europe and North Koreas lust to turn Japan into a nuclear waste land. Fear and War will dominate the market which puts a premium on Energy related issues and Defense issues. I know the large cap defense issues have been a bit of a bust, but smaller more focused issues have done quite well. In the long run I still view this oil thing as a bubble. Short term oil will continue to gain on a growing risk premium with the center of the battle shifting from Iraq to Iran. I did not think this new shift was going to hit so hard so fast. In the long run I still view this oil thing as a bubble. Remember higher prices encourage conservation and conservation becomes permanent. Conservation has a long term impact. OPEC is pumping the most in oil in 25 years. Oil often peaks in price in October. The world is much less dependant on oil than it once was. Remember oil would have to go to $100 per barrel to be were it was in real dollars in 1980.Anyway a lot of things look to be coming to a head in the next month to month and a half, so be careful out there.
James
Thursday, September 23, 2004
Johny Walker Scotch,letting the kids go naked ,simply Rather not
September 20, 2004
Hello,
Staying on message with their new social agenda the Kerry campaign’s new focus is best illustrated with Teresa Heinz Kerry’s pronouncement, “let the kids go naked for a while”. I have one question, why are the people most likely to go naked always the people who should lest likely do so? Meanwhile CBS gets caught doing a hatchet job on the President, forging documents a felony, faxing them interstate a felony, forging military and or government documents a separate felony, knowingly broadcasting a false report using fake documents, perhaps also a felony and of coarse trying to influence the outcome of an election al Quada would be proud and probably is. Yet never letting the facts get in the way, CBS is sticking to their story.
This week President Bush spoke before the clowns at the UN on the values of freedom and democracy. No organization more clearly represents and supports the corruption, tyranny and bigotry in the world than the UN. I still think we should give the land back to the Indians and let them turn the property into a hotel casino. Meanwhile a commercial airline heading for Washington DC was rerouted to do to the fact that passenger, singer Cat Stevens wound up on an FBI watch list, just goes to show you there is nothing more dangerous than a has-been pop star.
As mentioned before companies a wash with cash continue to pursue stock buy back programs; while Technology companies pursue their assault on the rules governing stock options, in the hopes of continuing to attract the best and brightest with no money down. Pundits continue to tell us the sky is falling and inflation is on the way ,even though the CPI growth rate is now lower than in the hey day of deflationary spiral scare. So why is the FED raising rates, simply to regain the use of a policy tool (interest rates) and to retain more flexibility in dealing with economic trails and travails.
Well September is here and on key the stock market sells off just after Labor Day. But wait, the stock market went up and I got buy singles for the first time in years on the market in general. My bet would be that we should see some softness until the middle of October and then on queue, up, up and away.
James
Hello,
Staying on message with their new social agenda the Kerry campaign’s new focus is best illustrated with Teresa Heinz Kerry’s pronouncement, “let the kids go naked for a while”. I have one question, why are the people most likely to go naked always the people who should lest likely do so? Meanwhile CBS gets caught doing a hatchet job on the President, forging documents a felony, faxing them interstate a felony, forging military and or government documents a separate felony, knowingly broadcasting a false report using fake documents, perhaps also a felony and of coarse trying to influence the outcome of an election al Quada would be proud and probably is. Yet never letting the facts get in the way, CBS is sticking to their story.
This week President Bush spoke before the clowns at the UN on the values of freedom and democracy. No organization more clearly represents and supports the corruption, tyranny and bigotry in the world than the UN. I still think we should give the land back to the Indians and let them turn the property into a hotel casino. Meanwhile a commercial airline heading for Washington DC was rerouted to do to the fact that passenger, singer Cat Stevens wound up on an FBI watch list, just goes to show you there is nothing more dangerous than a has-been pop star.
As mentioned before companies a wash with cash continue to pursue stock buy back programs; while Technology companies pursue their assault on the rules governing stock options, in the hopes of continuing to attract the best and brightest with no money down. Pundits continue to tell us the sky is falling and inflation is on the way ,even though the CPI growth rate is now lower than in the hey day of deflationary spiral scare. So why is the FED raising rates, simply to regain the use of a policy tool (interest rates) and to retain more flexibility in dealing with economic trails and travails.
Well September is here and on key the stock market sells off just after Labor Day. But wait, the stock market went up and I got buy singles for the first time in years on the market in general. My bet would be that we should see some softness until the middle of October and then on queue, up, up and away.
James
Wednesday, September 22, 2004
trying to stay on message,nothing like a little excess stimulatio
September 16, 2004
Hello,
Yes it is certainly true; more people now read these emails than watch CBS news with Dan Rather. The last couple of weeks have been something. Dan Rather seems to be doing more to single handedly sink the Kerry campaign than even John Kerry himself. Maybe it is just me but when you start putting Theresa Heinz Kerry out there as your spokes person from “lost in space” it suggest things are in a little bit of disarray. Meanwhile the al Quada backed Chechnya rebels have declared war on school children. Not on you and me but on our children. This leaves me with the question of the day, while Bill Clinton was in the hospital; does that make Al Gore the acting former president?
In Barrons I believe the term used was,” The current recovery has been largely a false one-unduly influenced by the “steroids” of excess stimulation”. The Wall Street community still continues to be very much divided over weather the economy is good or bad. Critics point to the accommodative FED (low interest rates), tax cuts (we can’t afford) and out of control deficit spending from Capital Hill. They warn of huge federal deficits, social security and Medicare meltdowns. And of coarse new job creation (payrolls) continues to be below previous expansions. For those of you over the age of 18 you have probably heard all this before.
History tells us however that this is not the only time that excess stimulation has had an effect. In the previous administration there was no recognition of the, peace divided (end of the cold war), the stock market bubble (creating excessive capital gains and capturing excessive capital gains taxes), massive accounting fraud, that accounted for excessive profits and excessive hiring from companies such as Enron, WorldCom, Global Crossing and so on. Coupled with Al Gore’s creation of new industry called the “internet”. Where English majors could make mid six figure salaries right out of college? All these events could clearly be defined as “excess stimulation”.
How does one really make money in mutual funds, it seems many small investors are still very confused and are still looking for a magic bullet. Folks there is no magic bullet .Most of the fund ratings are based on past performance, which as they say in the prospectus is no guarantee of future performance. Most performance is independent of and does not correlate with the level of risk an investor is willing to take. The risk level is based on investment style and asset class that the fund operates in. Most fund investors perceive volatility as risk. Volatility and risk are not a constant. Risk levels can increase and decrease overtime, with changes in markets, maturity of companies and industries. The key is to establish a plan of long term dollar cost averaging with your assets spread out over several different types of funds. Consistent contributions regardless of market conditions force investors to buy low .Even a simple asset allocation model also forces investors to buy low instead of chasing the latest investment craze and as they say in the business buy low and sell high.
James
"Knowledge is, in every country, the surest basis of public happiness." --George Washington
Hello,
Yes it is certainly true; more people now read these emails than watch CBS news with Dan Rather. The last couple of weeks have been something. Dan Rather seems to be doing more to single handedly sink the Kerry campaign than even John Kerry himself. Maybe it is just me but when you start putting Theresa Heinz Kerry out there as your spokes person from “lost in space” it suggest things are in a little bit of disarray. Meanwhile the al Quada backed Chechnya rebels have declared war on school children. Not on you and me but on our children. This leaves me with the question of the day, while Bill Clinton was in the hospital; does that make Al Gore the acting former president?
In Barrons I believe the term used was,” The current recovery has been largely a false one-unduly influenced by the “steroids” of excess stimulation”. The Wall Street community still continues to be very much divided over weather the economy is good or bad. Critics point to the accommodative FED (low interest rates), tax cuts (we can’t afford) and out of control deficit spending from Capital Hill. They warn of huge federal deficits, social security and Medicare meltdowns. And of coarse new job creation (payrolls) continues to be below previous expansions. For those of you over the age of 18 you have probably heard all this before.
History tells us however that this is not the only time that excess stimulation has had an effect. In the previous administration there was no recognition of the, peace divided (end of the cold war), the stock market bubble (creating excessive capital gains and capturing excessive capital gains taxes), massive accounting fraud, that accounted for excessive profits and excessive hiring from companies such as Enron, WorldCom, Global Crossing and so on. Coupled with Al Gore’s creation of new industry called the “internet”. Where English majors could make mid six figure salaries right out of college? All these events could clearly be defined as “excess stimulation”.
How does one really make money in mutual funds, it seems many small investors are still very confused and are still looking for a magic bullet. Folks there is no magic bullet .Most of the fund ratings are based on past performance, which as they say in the prospectus is no guarantee of future performance. Most performance is independent of and does not correlate with the level of risk an investor is willing to take. The risk level is based on investment style and asset class that the fund operates in. Most fund investors perceive volatility as risk. Volatility and risk are not a constant. Risk levels can increase and decrease overtime, with changes in markets, maturity of companies and industries. The key is to establish a plan of long term dollar cost averaging with your assets spread out over several different types of funds. Consistent contributions regardless of market conditions force investors to buy low .Even a simple asset allocation model also forces investors to buy low instead of chasing the latest investment craze and as they say in the business buy low and sell high.
James
"Knowledge is, in every country, the surest basis of public happiness." --George Washington
the circus has left town,,don't do the crime if you can't do the time.
September 1, 2004
Hello,
Folks the circus was in town this week, traders fled for the Hampton and professional protesters descended on the city. Trading on NASDQ and NYSE were at lowly levels. The data however never rests, and both the ISM and the payroll growth gave investors something positive to think about when they return from their week long hiatus. Senator John Kerry earned another purple hart, when Democrat Senator Zell Miller decided he was mad as hell and not going to take it anymore. And yes I can assure Bob Dole, that Senator Kerry did bleed this time. Senator Miller went as far as to challenge several members of the partisan main stream media to a duel. I haven’t been that excited about politics since I found out that Al Gore discovered the internet. The protests remained more of a media event with little or no interest from hardened New Yorkers who were more annoyed by all the inconvenience than sympathetic to any cause. Protesters
continued to complain about their conditions in captivity, funny a bunch of rich white kids get arrested spend 8 hours in a temporary lock up, yet any black male caught urinating on the street could spend a lovely weekend in posh digs in Rykers Island.
Since the market that has preformed in a sub par manner since early January what’s an investor to do? First I blow against the wind with this one; I would suggest that crude oil will plummet during the next year. Primarily because of lessening tensions in the mid east, Iraq’s transition to democracy which is and will continue to go much better than anyone has imagined and excess pumping by other OPEC members flooding the market with oil. We could see a short term boost if Iran continues to misbehave but the party is clearly over in the oil patch. 2nd corporate earnings are valuing the S&P 500 at 15 times next year’s earnings. Which is the lowest valuation since the late 1970’s or perhaps the recession of 1982. 3rd Mutual fund inflows by individual investors are usually a good gage of what not to do. Currently equity fund inflows are far off there highs. Recently I also noticed that Equity fund cash positions also seem to peak around market tops, this indicator is also significantly off its highs. Yes interest rates will continue to move slowly upward, but this seems to be having little or no effect on the bond or stock markets. And finally the inflation threat despite the continued harping is a non starter, productivity growth continues to push up wages, and push down prices .Industries were productivity is the highest such as technology, this has become the most evident. Historically September is the worst month of the year for stocks giving investors and opportunity to pick up some good values and as many of the market risks continue to get sorted out this September may be a historically cheap time to but equities.
Buy low sell high,
James
Hello,
Folks the circus was in town this week, traders fled for the Hampton and professional protesters descended on the city. Trading on NASDQ and NYSE were at lowly levels. The data however never rests, and both the ISM and the payroll growth gave investors something positive to think about when they return from their week long hiatus. Senator John Kerry earned another purple hart, when Democrat Senator Zell Miller decided he was mad as hell and not going to take it anymore. And yes I can assure Bob Dole, that Senator Kerry did bleed this time. Senator Miller went as far as to challenge several members of the partisan main stream media to a duel. I haven’t been that excited about politics since I found out that Al Gore discovered the internet. The protests remained more of a media event with little or no interest from hardened New Yorkers who were more annoyed by all the inconvenience than sympathetic to any cause. Protesters
continued to complain about their conditions in captivity, funny a bunch of rich white kids get arrested spend 8 hours in a temporary lock up, yet any black male caught urinating on the street could spend a lovely weekend in posh digs in Rykers Island.
Since the market that has preformed in a sub par manner since early January what’s an investor to do? First I blow against the wind with this one; I would suggest that crude oil will plummet during the next year. Primarily because of lessening tensions in the mid east, Iraq’s transition to democracy which is and will continue to go much better than anyone has imagined and excess pumping by other OPEC members flooding the market with oil. We could see a short term boost if Iran continues to misbehave but the party is clearly over in the oil patch. 2nd corporate earnings are valuing the S&P 500 at 15 times next year’s earnings. Which is the lowest valuation since the late 1970’s or perhaps the recession of 1982. 3rd Mutual fund inflows by individual investors are usually a good gage of what not to do. Currently equity fund inflows are far off there highs. Recently I also noticed that Equity fund cash positions also seem to peak around market tops, this indicator is also significantly off its highs. Yes interest rates will continue to move slowly upward, but this seems to be having little or no effect on the bond or stock markets. And finally the inflation threat despite the continued harping is a non starter, productivity growth continues to push up wages, and push down prices .Industries were productivity is the highest such as technology, this has become the most evident. Historically September is the worst month of the year for stocks giving investors and opportunity to pick up some good values and as many of the market risks continue to get sorted out this September may be a historically cheap time to but equities.
Buy low sell high,
James
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