Good Morning All,
The S&P 500 closed above 1050 last night. This powerful advance has led Asian and European markets higher in what North Americans refer to as "overnight trading". Our often-expressed initial target of 1060 will likely be exceeded at the opening bell, and after allowing for some momentary profit taking, markets should begin their march toward 1200. This will not be a long trek; it will more closely resemble a rocket launch. It is my belief that the little duckies have successfully aligned themselves in conjunction with interstellar activity, sunspots, phases of the moon and any number of Nostradamus' predictions to set the stage for a sharp, strong advance into early October.
Actually folks, I don't really believe that markets act in either an orderly or a random manner; and I certainly don't believe that forces unknown to us have any influence on market behavior (unless of course we are talking about rogue bankers). What I do give credence to is my oft-stated view that bears hold cash they must invest, and that bulls hold stocks they must one day sell. The only question to be asked is; how many are in each group? The answer, as posited in my previous treatise, is thus: the bears who have missed the 50% market gains that were triggered in March must now spend their cash, and they will do so in a hurry. So enjoy the ride and be ready to depart the scene as we approach either 1200 or the second week of October.
Although traders must remain nimble, longer-term investors may rest assured that the five year up cycle has begun in earnest. The signal may have been given by the recent renewed interest in stalwarts such as GE and Alcoa. The tech rally is still game one but own some commodity based stocks including gold. Many have been mentioned in previous letters at much lower prices.
Wednesday, September 16, 2009
Tuesday, September 1, 2009
September 1st Edition
Good Morning All,
Although markets closed out August with somewhat less than an august robustness, it should be noted that the final numbers still added a sixth month to the recovery rally. Bulls appear to be somewhat worried by the recent volatility in China, while bears, particularly those of an ideological bent, rant on about deficits and bailouts, something they seemed less concerned with when the Bush-Cheney regime was creating both the trillion-dollar war for oil and the deregulatory grounds for the bank debacle.
This letter has been bullish since late October of last year, which for many, though not all, sectors, was a tad too early. But then again we were calling for the end of the world in mid 2006, months before the May 07 peak in bank stocks and the October crash that followed. Time, however, passes rather quickly and the worst things in the world are never permanent. Depressions, recessions and wars each end in time, at least for most "civilized" partners. It has been my view that we were offered a multi-generational opportunity at the end of last year, one which became even greater by March 2009. Some of you might remember the stock lists I first published in late November and added to as the months went on. Should you wish to see them again...ask.
Markets will either correct soon from 1060 S&P 500, or in early October from 1200 plus. Be confident in the future, but remain nimble.
Commentary
The nutbars in America have been out in full force these last months as the demagogic right continues to rally their intellectually-challenged minions in opposition to all things Obama. Health care has been the main focus of much of this insanity as many of the uninsured, the barely insured and the already government insured have marched to the tune of the INSURANCE companies and other assorted lobby groups. Reminds one of the P.T. Barnum dictum "there's a sucker born every minute"...or a customer.
I am also reminded, anecdotally, of a story told to me by a friend, who while visiting Florida last winter was confronted by another resident of his complex with a statement on Canadian medicare. "So you are a Canadian", he stated, "yes", Paul proudly replied. "So you have that medicare, where you have to wait for treatment" he continued. "Well", Paul quietly observed, "I guess we do have to wait for some things, but I have never met anyone who lost their house over it".
To this story may I add my humble suggestions to the American health care debate. Why not just expand the existing Medicare and Medicaid programs, by dropping the age eligibility on the former first to 60 from 65, and then gradually make it inclusive of 55 and 50 year olds. For the latter, which presently covers 40 million of America 's poor, why not just double the maximum income requirement. This could be expensive, but cost savings would accrue from the limits paid on drugs and treatments which are now part of the existing programs. The government could, at the same time, pass "tort reform" wherein caps could be placed on lawsuit settlements, much as they presently are by insurance companies. So much for a life, a lung, a leg, a liver or a linguini. This would stop the unreasonable settlement scam wherein some chain-smoking, wife-beating, child abuser who has spent a life chasing down an unending series of six-packs with shots of bad bourbon, from receiving gazillion-dollar awards for having the wrong diabetic leg amputated...at the expense to entire system.
Although markets closed out August with somewhat less than an august robustness, it should be noted that the final numbers still added a sixth month to the recovery rally. Bulls appear to be somewhat worried by the recent volatility in China, while bears, particularly those of an ideological bent, rant on about deficits and bailouts, something they seemed less concerned with when the Bush-Cheney regime was creating both the trillion-dollar war for oil and the deregulatory grounds for the bank debacle.
This letter has been bullish since late October of last year, which for many, though not all, sectors, was a tad too early. But then again we were calling for the end of the world in mid 2006, months before the May 07 peak in bank stocks and the October crash that followed. Time, however, passes rather quickly and the worst things in the world are never permanent. Depressions, recessions and wars each end in time, at least for most "civilized" partners. It has been my view that we were offered a multi-generational opportunity at the end of last year, one which became even greater by March 2009. Some of you might remember the stock lists I first published in late November and added to as the months went on. Should you wish to see them again...ask.
Markets will either correct soon from 1060 S&P 500, or in early October from 1200 plus. Be confident in the future, but remain nimble.
Commentary
The nutbars in America have been out in full force these last months as the demagogic right continues to rally their intellectually-challenged minions in opposition to all things Obama. Health care has been the main focus of much of this insanity as many of the uninsured, the barely insured and the already government insured have marched to the tune of the INSURANCE companies and other assorted lobby groups. Reminds one of the P.T. Barnum dictum "there's a sucker born every minute"...or a customer.
I am also reminded, anecdotally, of a story told to me by a friend, who while visiting Florida last winter was confronted by another resident of his complex with a statement on Canadian medicare. "So you are a Canadian", he stated, "yes", Paul proudly replied. "So you have that medicare, where you have to wait for treatment" he continued. "Well", Paul quietly observed, "I guess we do have to wait for some things, but I have never met anyone who lost their house over it".
To this story may I add my humble suggestions to the American health care debate. Why not just expand the existing Medicare and Medicaid programs, by dropping the age eligibility on the former first to 60 from 65, and then gradually make it inclusive of 55 and 50 year olds. For the latter, which presently covers 40 million of America 's poor, why not just double the maximum income requirement. This could be expensive, but cost savings would accrue from the limits paid on drugs and treatments which are now part of the existing programs. The government could, at the same time, pass "tort reform" wherein caps could be placed on lawsuit settlements, much as they presently are by insurance companies. So much for a life, a lung, a leg, a liver or a linguini. This would stop the unreasonable settlement scam wherein some chain-smoking, wife-beating, child abuser who has spent a life chasing down an unending series of six-packs with shots of bad bourbon, from receiving gazillion-dollar awards for having the wrong diabetic leg amputated...at the expense to entire system.
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