Category: Quote of the Day

Those who won our independence by revolution were not cowards. They did not fear political change. They did not exalt order at the cost of liberty.
- Louis Dembitz Brandeis, 1856 - 1941

Question asked on 07/05/2008 at 06:17 AM :: Comments to date: 0

Category: Life

Enjoy Life! Take a holiday and have fun. Happy 4th.

Question asked on 07/05/2008 at 06:16 AM :: Comments to date: 0

Category: Stocks

Yesterday I said look at distressed financials.
I like to see what sectors have been punished to the point of being totally beaten down and distroyed.
There are 2 sectors right now in that category. Auto and financials.
I am not goiong to look at auto's now due to the economic cycle of personal spending habits. People are pulling in their spending habits due to the rise in gas prices and utilities, therefore they will not buy a new car as readily as they used to.
The fed has been saving the financials Since August of 2007 from a full blown panic so we don't create a depression like the 1929 crash. Since the Fed knows that they have to keep the market and the financials sound, so the depression doesn't happen, that is why I look to buy the best of the beaten up sector. A stand out in the crowd is ACAS.
They have increased their dividend every year (which is the critical part) and have old loans on the books that people will not default on due to the fact they have too much equity in the loans. This would allow the borrowers the ability to refinance to buy time if they had a tough time of paying the loan off.
The market is punishing this company because so many bank stocks have cut their dividends and the big buyers are anticipating that ACAS will do the same. Therefore they are pricing the stock as though it will cut the dividend by 40%. Right now the stock is yielding 16%.
Even if they cut the dividend in half the stock will yield 8%. So put your money here and wait long term to have the financials come back. While we wait I will be happy to collect 16% on my money.
If any of my readers know of other quality stocks like ACAS please write back to me so I can share it with the others.

Question asked on 07/03/2008 at 05:41 AM :: Comments to date: 0

Category: Stocks

The S&P 500 has dropped sharply throughout the month of June and this has resulted in the 10-month moving average crossing bearishly below the 20-month moving average. This type of crossover doesn’t happen all that often.
The last time the bearish crossover happened was in March 2001. Sure, the S&P had already dropped 400 points from its high, but it dropped another 400 points over the following year and a half. So we could have a long way to go before we see an end to the bear market.
we are likely to see rallies like we saw in the spring of ‘01 and fall of ’01. In fact, I look for one in the near future, given the number of stocks that are oversold after the last two weeks of selling. In fact, I ran a scan of stocks in the Nasdaq 100 and S&P 500 to see how many of them were oversold based on a 14-unit slow stochastic below the 30 level.
The results were astounding. In the NDX, 75 of the 100 met the criteria and in the S&P, 357 met this requirement. Just for kicks, I ran the opposite scan as well, stocks in the two indices that had slow stochastic readings above 70. There were a whopping total of four in the NDX and 26 in the SPX. These are incredibly one-sided ratios and suggest a bounce is due. But don’t get caught up in the bounce and think that the bear market is over.
If you haven’t heeded the warning yet, you should take steps to preserve capital. If you use options, look at buying some long-term puts on ETFs like the Spyders, Diamonds, or QQQQ. If you are averse to using options, look at some of the double inverse ETFs that are out there. Here is a quick list:
ProShares Ultrashort QQQQ-QID
ProShares Ultrashort Dow 30- DXD
ProShares Ultrashort S&P 500- SDS
ProShares Ultrashort Russell 2000- TWM
ProShares Ultrashort Semiconductors- SSG
ProShares Ultrashort Financials- SKF
ProShares Ultrashort Basic Materials- SMN
ProShares Ultrashort Technology- REW

These funds will rise in value as the associated ETF falls, and these ETFs are leveraged so the move is double the down move. In other words, if the QQQQ falls one percent, the QID will rise by two percent.
Now is not the time to sit idly by, now is the time to protect your assets.
Remember the market does not like INFLATION. Look at the market from the 70's which we are similar to since 2002.
We are similar to the 70's because the market did not improve it's top until after Volker stopped the inflationary trend in 1982. Will it take that long again? 2012. I believe it will. So pick the metals sector as the only bullish side and be selective at bottom picking the financials that pay big dividends.

Question asked on 07/02/2008 at 05:28 AM :: Comments to date: 0

Category: Quote of the Day

To live outside the law you must be honest.

Being noticed can be a burden. Jesus got himself crucified because he got himself noticed. So I disappear a lot.

I accept chaos, I'm not sure whether it accepts me.

People seldom do what they believe in. They do what is convenient, then repent.

When you feel in your gut what you are and then dynamically pursue it - don't back down and don't give up - then
you're going to mystify a lot of folks.

It was like a flying saucer landed. That's what the sixties were like. Everybody heard about it, but only a few really saw it.
- All from Bob Dylan

Question asked on 07/01/2008 at 07:43 AM :: Comments to date: 0

Category: Stocks

. Use panic selling as an opportunity to position for profits. The bears may continue to shake out weaker longs, but I expect the bulls to begin bringing stocks back over the weeks ahead.” Mid week it looked like sellers weren’t quite finished shaking out the weaker longs. My observations could be considered an understatement, as subsequent stock market declines constituted a very healthy “shake out.”
Falling share prices hurts the bottom fishers and when they get their stops picked off the bottom will be in.
This past week, stocks moved still lower on record high oil prices, financial sector woes, Federal Reserve futility, and international tensions. The dollar was down and gold was rising. Fear is pushing stock indexes to the next levels of support. We’re on watch for a turn, as we look to stay a step ahead of the crowd.
So don't panic and sell now even a few stocks went up last week that were not oil and agricultural related.
Like CMED was up 9% in one week. This is one of Chinas strongest plays now and their economy is booming due to the preparations for the Olympics. But don't think that will stop the economy after the games are over. The Chineese will have had a taste of the better life due to the inteaction of the world and they will want more after beiing so repressed for so long.

Question asked on 06/30/2008 at 05:10 AM :: Comments to date: 0

Category: Politics and the Economy

It was on this day in 1956 that President Eisenhower set pen to paper and signed Public Law 84-627.
This was the law that dedicated the federal motor fuel taxes to highway use, increased the federal contribution to certain transportation projects to 90%, and launched what is known as the Interstate Highway System.

Question asked on 06/29/2008 at 04:57 AM :: Comments to date: 0

Category: precious metals

Just when you thought reality was setting in at the Fed, you get reminded how silly that idea really is.
I say that because lately the Fed has been talking about how bad inflation is, and how they need to be ‘vigilant’ so that inflation expectations don’t deteriorate.
If you talk to anyone on the street, I bet they have noticed that prices are higher for just about everything. I don’t know about you, but I sure think that inflation expectations are already pretty bad.
So, you would think they’d be really hawkish about inflation at the meeting.
Maybe that’ll happen at another meeting, because it sure didn’t happen at the one on Wednesday.
Sure, they mentioned inflation expectations have increased. But here’s the line I read on Bloomberg that killed me …
“The Committee expects inflation to moderate later this year and next year”
That’s right – even though gas prices have nearly doubled in the last year… even though the price of wheat has skyrocketed… even though the price of nearly every food you can think of has gone higher… they expect inflation to moderate.
They think that when the U.S. economy slows it will reduce demand and prices will move down to stimulate demand. This makes sense, except for the fact that the world isn’t all about the U.S.
You see, the price of imports into the U.S. has gone up well over 15% in the past year. Yet for the most part, this inflation hasn’t completely hit consumers.
And the sad fact is, the prices we pay for overseas items will continue to move higher. Over in Asia, they are experiencing some wicked-nasty inflation right now. And it won’t stop in the next year, despite a slowdown in U.S. demand.
So long as emerging economies like China continue to grow as fast as they are, inflation will continue to be a threat. And the reason why is simple. Because as these emerging economies modernize, they will need more food, more gas, more wood, more metal, more of everything per capita than what they use today.
That means demand from emerging economies for all these things could double… even triple in the next ten years. That demand should more than offset any reduced demand from the U.S. or other modernized economies.
It’s no wonder that countries in Europe and other parts of the world are actually increasing their interest rates. They’re doing it because inflation is more than a threat, it’s real. It’s there, affecting everybody’s lives.
And it’s affecting everybody here too.
So I will beat the drum again for precious metals.
The metal stocks have been beaten down so far that this is the begining of the last cycle for metals. Gold and silver go higher after inflation has its affects on the economy. Therfore the rally this week is a psycholgical shift towards inflationary hedges. That is gold and silver.

Question asked on 06/28/2008 at 07:11 AM :: Comments to date: 0

Category: Quote of the Day

There are three ways to get something done: do it yourself, employ someone, or forbid your children to do it.
- Monta Crane

Question asked on 06/27/2008 at 10:07 AM :: Comments to date: 0

Category: Business

Knowing that a record number of Americans can't pay their mortgages and have begun defaulting on their credit cards, it's not surprising new car sales are slumping. But it's shocking to see how fast and how far new car sales have fallen. New car sales are now running at an annualized rate of 12.5 million vehicles, the lowest level seen in decades and a huge drop from last year's 16.3 million vehicles.
What does this mean to the car companies and the market?
This is the ripple effect of the oil and sub-prime problems. Same as the 1970's.
Therefore if history is any indicator of the future the market will trade between 8000 and 14,000 for the next 4 years.

Question asked on 06/26/2008 at 04:11 AM :: Comments to date: 0