Wednesday, 30 December 2009

Learn To Trade: Your source for investment or investments, stock, stock market, and stocks info


Imagine a 15 car train sitting in a train station. Now, take a look at the train operator. Imagine the locomotive gears are jammed and the train operator is frantically working too unlock the gears. He is only able to move the train forward or backward about 10-15 feet in either direction. It’s safe to say that the train isn’t going anywhere until the operator fixes the train or until the situation gets resolved. This example, is the same type of thing that happens to a stock in the stock market. Let’s say that a stock has been going up and down for 3 to 5 months without much upside or downside progress. Sometimes a stock can get “stuck” trading in a range. When a stock starts trading in a range where support and resistance are clearly defined, it’s best to pass on that opportunity and move on to another stock that is moving. A stock that is moving will provide more of an opportunity for good fortune on your investment or trade. If for no reason other than to have your money work rather than idle by because even if you get stopped out rather quickly. You can then move on to another potential winner, rather than be stuck with a position that vacillates back and forth for an extended period of time. There is an opportunity cost to having your money sitting in an investment or trade that isn’t doing anything. The cost is lost potential profits (i.e. opportunity) from stocks that are trending up, while you’re sitting in a stock that isn’t doing anything. Now, imagine a train that is moving top speed across the country.But this train DOES slow down to make intermittent stops. The train allow passengers to get on and off with ease. Try getting off a train going 157 miles per hour. The result isn’t pretty. This example is characteristic of a great stock. A stock in which the trend is clearly up (and picking up steam), but it DOES pullback occasionally (because people are exiting or lightening up on their position and other people are now getting aboard this uptrending stock. And this new group of passengers will take the stock to higher highs. Stick to stocks that are active and stay away from stocks that are not going anywhere.

H.B. Fuller Company 10-Year Chart

Once you have determined that the train is moving (In this case, I would say that it started moving upwards in late 2000, early 2001), you are looking to become a passenger who wants to jump aboard this train. You want to wait for the right time though, because there shouldn't be any rush. Too many people think that when a stock is moving up, it's going to get away from them. That's people's emotion talking for them. No stock will ever get away from you, if you wait patiently for that buying opportunity.

Cree, Inc 10-Year Chart

Here is an example of a stock which languished for 8 years before finally breaking out this year. If you bought this stock in March 2001 for $20, it was still $20 in March 2009. You made no return in those 8 years, and missed out on other potential winning stocks in the market. To top it off, the value of the dollar has gone down which eroded your purchasing power. $20 in 2001 won't buy what $20 in 2009 will buy. So you would have been losing wealth even though the price was the same. Now, the price has increased to $55.28 as of today's close, so you would have made enough to cover inflation and made a pretty decent profit after 8 long years, barely. Why not invest your money somewhere else where the action is during 2001-2009, and then put your money into CREE in 2009?

Monday, 28 December 2009

Closing Out the Year

There are about 3 days left in the trading year. It is safe to say that 2009 was an unprecedented year. I think unprecedented was one of the most used words in 2009. Markets worldwide have moved straight up since March. The S&P 500 has closed up the last 9 out of 10 months. The NASDAQ has closed up 9 out of 10 months. The FTSE finished up 8 out of 10. The Dow 8. The DAX 8. The CAC 8. The SENSEX 7. The Straits 7. The Bovespa 9. The RTSI 9. The Hang Seng 7. And the weakest performer the Nikkei which was up 7. (I left out some, for expediency) Although for the Nikkei, most of that move was made in the last 19 trading days. So you can see that 2009 was definitely a year to be long. So, what's in store for 2010? I, honestly, have no clue because my expectations for 2009 were greatly exceeded. So it begs the question, how can 2010 outdo 2009. The mainstream media wants to talk up the fact that the S&P 500 is up 24.71% as of Thursdays close last week. But really the S&P 500 is up 66.51% from the March 9th close in just 209 trading days. So are we to expect another 66.51% rise straight up for 2010? Well, some inflationists, such as Marc Faber, think that as long as Ben Bernanke keeps printing more (phantom; I will explain the phantom part in later blog posts) money the US stock market can continue to rise unabated. But he thinks the downfall will be the US dollar and Treasury bonds in the long run, which he probably right about anyway. The question is when will it come. Do we need to know or predict what is going to happen next year to make money? The answer is, No. I believe that the future can be predicted in current stock prices by simple technical analysis. So, right now, I believe the trend is up, but my problem is how long can the markets go up without some kind of fundamental backing. I don't need much just more than a little bit. I am sure there are some companies out there making money in the last two years. Are they going to earn enough to lift the world economy? I guess we will see in 2010.

Thursday, 10 December 2009

Rose Colored Glasses

A lot of people (professional & amateur alike) are looking at the past 8 months in the stock market and proclaiming a new bull market. And they may be right, but only in the short term. It helps to take a look at the big picture every once in a while to see where you are. The optimism in every market right now is contagious (i.e. gold, oil, world markets, coal, copper). All these markets have been going up with each other roughly around the beginning of 2009 in the so-called “reflation trade”. This premise is based on the idea that the Fed can create inflation at will, regardless of the dynamics of market activity. So far it seems to be working (or maybe not). I look at the S&P 500 as a general gauge to the US markets. Why don’t I look at the Dow Jones Industrial Average. Because it is only 30 of the largest US companies in market capitalization. It doesn’t represent the US markets as broadly as the S&P does. And if you want an even broader measure, you should take a look at the Wilshire 5000. The S&P 500 is good enough for me, because that’s where big money tends to play, and in the last few months the big money has been reluctant to add to their positions. Even with the declaration that the recession is over, the market has failed to move more than 8% in the last 3 months. Shouldn’t the market go up, now that the recession has been declared dead? You would think so. But markets don’t work like that. You need to be a contrarian at heart to make any money. And right now, there isn’t a whole lot of opportunities to go long because everything is up. And so far, we have been grinding and chopping for the last 20 days or so. It is my belief that markets will probably start heading down fairly soon, but I think it may be a long process before we finally reach the peak. So take a look at the small picture and then at the big picture. Two different perspectives on the same thing, huh? Exactly. For someone, just looking at the last year the market looks like a great investment. But for someone looking at a bit larger time frame, the market looks like a straight line in an almost vertical path. To believe the market is going to continue the same trend up, you must believe that that almost vertical rise since March 2009 will continue, no? So, if the trend does continue, the S&P 500 should be breaking the all-time highs in 2007 by the end of 2010. Likely or not, you tell me?

Small Picture

Big Picture

Back from my hiatus


Hi, I am back after a pretty long hiatus from regular blog posting. To be honest, I got tired of saying the same things over and over again. It is difficult being a realist in time where society is desperate for any kind of optimism. Even bad news is optimistic these days. We have entered a new phase of denial for all who believe the bureaucratic officials who espouse only that the “worst is behind us”. I believe that this statement is very far from the truth of the situation. The majority of people who have little knowledge of economics, finance, banking, law, and politics have been duped into thinking that the current recession we are in is something that we will escape from without a price being paid. Ask yourself, what’s really changed? The truth is when you sit down and think about it, very little. One must have an understanding of the current situation and realizes its importance as a key place in world history. We don’t realize it now, but the times we are living in now will be written and talked about for many years. I am going to keep trying to tell the truth about the situation, no matter how much the “truth hurts” as they say. In my recent blog respite, I learned some things. Some things that I think are quite important that everyone know, in order to stay afloat in our current economic system. And once you grasp the idea of these truths, you will be better able to survive in the next few years. In addition, it might answer some questions you may have had, and make sense of things that occur every day in the world.

Tuesday, 1 December 2009

Market Musings

The S&P 500 finished up 5.74% in November, making that 8 out of 9 months since the March lows that the index has closed up. There aren't many examples in history showing that kind of uninterrupted rise except for "actual bull markets". If the market the market has been continuously going up for 8 out of 9 months and this usually only happens in bull markets; then why don't I feel confident that this party is going to last. Well, its the performance of the market recently. For all the hype, the market is up very significant in the last three months, and it seems to be losing momentum. The trend is still up, but I think it would be dangerous to start buying now if you haven't already.

Friday, 13 November 2009

Currency in Circulation

Divorced from Reality

I have been on break for awhile. Had to get some work done and figure some things out. Full-time trading doesn't always allow you to have spare time. I have been amazed at the market's ability to go up month after month yet reports about the health of the economy show deterioration. I still believe the rally is based on false hope and the economic realities will have to be addressed. From a trader's standpoint, every stock I see is getting close to nosebleed levels based on a glance at it's chart. I like to buy stocks going down or experiencing correction. Not stocks in straight lines upward.

Monday, 28 September 2009

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap: We saw the first signs of professional selling last week. The market’s persistent rise from the March lows finally saw some sellers come back into the market. The Federal Reserve made a policy statement that Wall Street didn’t like. This whole bear market is a process. Right now, I believe we are experiencing the upwave within a larger downwave of a bear market.

Friday, 25 September 2009

Monday, 21 September 2009

Weekly Wrap: Your source for stock, stock market, and stocks info


Hi, the S&P500 rose 2.45% for the week. If you look at the chart, it was a steady rise up. Outwardly, the stock market’s rise is anticipating the economy picking up steam. I am a little skeptical of the markets rise because you would need to see a concurrent rise in the economy. Either the markets are wrong and they will start to go back down again. Or the economic recovery is here and happy days are here again.

Monday, 14 September 2009

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap: Last week the Federal Reserve said in its beige book that the U.S. economy is stabilizing. How ‘bout…no. The U.S. economy is stabilizing!? Only if you live in a dream world. There are many economic measures of health that you could look at such as credit growth, auto sales, gambling sales, retail sales, unemployment, housing, etc. These reports are apparently “less bad” but they are still bad. The market has just become numb to bad news anticipating a rapid recovery. Foreclosures dropped a little in August from their record high in July, but still looking to march higher as more and more people are underwater on their mortgages and can’t pay. That spells trouble for the banks, by the way, but you won’t hear any mention of it now because of the rise in optimism since the March lows. Gold has broken out above and closed above $1000 to a record of $1004.90. Keep your eye on gold because it is “real money” and with all the global money printing going on, somebody is going to have to pay the bill. I think the “powers that be” will try to pound the price of gold back down, because they can’t afford for the world to start panicking about the currency they do business in. What I think is interesting is that there is a concerted effort to hold the price of gold down over the last 2 years, and they haven’t been able to do it. The demand for gold right now continues to rise and I don’t think it will abate. You can expect higher prices for gold in the coming decade without a doubt (same with oil, too.) The market blazed higher last week. All the index made new closing highs for the year. Completely taking bears like myself by surprise as I thought the market was due for some kind of correction. I don’t know how long the market makers can keep propping the market up with no volume, but it will end. They always do.

Consumer Credit Comeback!?

The graph below just speaks to the true nature of credit contraction taking place in the "real economy". What people are really doing is cutting back on credit. We are witnessing the massive shift in psychology from frivolity to frugality. I also think this change will be the new normal. Americans aren't going back to the days of "spend, spend, spend money I don't have".

Friday, 11 September 2009

Commentary: Your source for news, commentary, and stock info

My thoughts on this rally....

The S&P 500 broke to new intraday highs yesterday confirming that the bear market rally is not over. In fact, it may go much higher. I don’t know what to make of this rally. Is it a bear market rally or a new bull market? You don’t want to continue to stay bearish as a new bull market starts. But my instincts tell me that there is something not quite right with this rally. For example, the market is continuing to rise on decreasing volume. Where is the professional money? Only they have the power to drive prices up, but we have prices go up on decreasing volume. Has the financial mess has really been fixed? Banks are still holding trash that they can’t get rid of on their balance sheets. Companies don’t seem to be at all anxious to start borrow or hiring new people. We could go all the way back to the 2007 highs, like some bullish pundits are speculating. But I think at some point “the crowd” will realize that the entire rally is fake, and it will collapse. That’s my view. For now, you want to be long. I think when we get to the end of this rally, something event will signal the top. I also think it will be fairly obvious to those who follow markets closely.

Tuesday, 8 September 2009

Military Spending

What did Eisenhower say about the "military industrial complex" again?

Natural gas continues to plummet


Natural gas plunged 10% last week. I broke to new lows. Long speculators have been unceasingly punished for attempting to "buy the lows". I am no expert in natural gas fundamentals, but I am expert in charting. And the chart says that market participants have been exceeding bearish on the prospects for natural gas, willingness of bears to short the market still remains but the their power is waning. It is only a matter of time before the bulls regain control of this market. It is obvious that their is massive accumulation going on from professional money, but they haven't soaked up all the supply. When they do, a new bull advance in natural gas will start. So, from an opportunity standpoint natural gas is probably one of the best investments out there.

Monday, 7 September 2009

Weekly Wrap: Your source for stock, stock market, and stocks info


We started last week with a sell-off on Tuesday that the market retraced those losses by Friday. The payroll number came out at 216,000 people losing jobs. I sound like a broken record, but you can’t have a “recovery” when people are still losing jobs. We aren’t just losing a few thousand, we are losing jobs in the hundreds of thousands. In other news, retail sales for the month of August fell 2.3%. Apparently, it has been the smallest decline since Sept. ’08. A lot of the pundits think that because consumer spending was 70% of the economy in the boom times, that Americans are going to come out of their shells again and start spending like the good ole days. I believe this theory to be false. I think there has been a dramatic shift in the psyche of the American consumer. Their habits will not be towards profligacy but towards frugality. I showed a chart on my blog on March 10th titled “Seismic Shift” which showed personal consumption as a percentage of GDP. Everyone who pays attention to financial news knows that “in the past” the American consumer made up 70% of the U.S. economy. So, will that fact remain unaltered? I don’t think so, you are already seeing and will see more of a pullback in consumer demand for goods people really don’t need. What is interesting last week was the big move in gold? There is a lot of chatter about what is behind the move in gold. I don’t think the chatter really matters. Who cares? The point is gold is moving and do you have a plan? I am planning to put a significant portion of assets into gold at some point. I have been looking for almost a year for a correction in the yellow metal because of all the bullish pundits and newsletter writers who say that you must own gold because of the dollar collapse. I do believe there will be a currency crisis in the near future and those holding only dollars will lose substantial purchasing power (i.e. wealth). For now though, I want to see a pretty big correction, but gold just won’t go down. So, for all of you that believe news comes first then markets move. Explain to me why gold is moving when there really isn’t any news to support it. Let’s say gold takes off and goes up to $1600 an ounce or goes up and collapses to $600 an ounce, do you think you will be told the reason (from the mainstream media) before it actually happens? Definitely not, the reason for the move will only come AFTER gold makes its move. That is the reason why to actually “make money” you have to buy or sell something before other people catch on.

Friday, 4 September 2009

Monday, 31 August 2009

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap: Last Week marked another week that the market closed higher, albeit a small one. The S&P 500 hit its highest point (1039.47) in the entire run up from the March lows. You have may have heard the saying “Buy ‘em cheap, sell ‘em dear”. Or may have heard,”Buy the dips, sell the rips.” They are essentially saying the same thing. And it goes for all markets, not just the stock market. That means the housing market, the fish market, the bond market, or even your local grocery market. You have to buy goods (and plenty of them) when they are cheap, and sell them when they are expensive. We all do this when we go to our local supermarket, but why is it that the majority of investors don’t do this when it comes to the stock market. Well, there is a reason. But that’s a side issue and I won’t go into the “Why?” investors do it. I am just going to tell that you should approach the stock market the same way you approach the supermarket. When an item is on sale in the grocery store, we rush to buy more. When an item is on sale in the stock market, investors dump the stock because they fear they are going to lose all their money. You should be doing exactly the opposite. You should be buying a stock that is going “DOWN”. It seems counter-intuitive. But if you want to make money, that’s what you have to do. Generally, you have to act contrary to popular public opinion (“the crowd”) in order to be successful. So, with that said, herein lies the point. The market has now vaulted up from the depths of pessimism in early March to the throws of optimism in late August for six months IN A ROW. To continually go up without a single month closing down is impressive. What is equally impressive is that you would be hard pressed to find a time period in which the market went up six months in row in the last 100 years and it didn’t kick off a new bull market. Especially considering the type of collapse the stock market had in 2008. That’s what makes this time period extremely interesting because if the market is going to collapse (like I think it is), then it is going to happen very soon because eventually the market will run out of steam. It is already running out of steam. The volume has been dying off every month that we go up indicating that the professional money is not interested in higher prices. You should know that 70% (maybe even more now) of trading in the market is done by professionals and it is THEY who truly have the power to move markets up and down. They are the only ones with the kind of capital that can stop a bear market in its track and launch a new bull market. A keen observer would have spotted their participation in late February and early March, when the volume was expanding. That let you know that the professional money was in there buying the market from all the panicking investors who were listening to all the bad news at the time. Right now most of the news is being portrayed as good, yet the professionals are not interested in buying more, which is why you don’t see the volume expanding (it’s shrinking). Meaning that as soon as they start selling, there will be nothing anyone can do about it. And from a technical perspective, I think the market has maybe another 2 months up, which would make it eight months IN A ROW from the March lows. I think that would be absurd in my opinion because I don’t see any of the economic data being released supporting stock prices at the levels. So I am anticipating a correction somewhere in the next two months. It could be September or October. It doesn’t really matter when it happens because there are very few good risk/reward opportunities to the long side. Because of that, it must be time to start looking to the short side (being contrarian). Buy ‘em cheap, sell ‘em dear. In other news last week, Ben Bernanke was nominated for another term by President Obama. Answer me this? Why is it that the American people don’t decide (i.e. vote) on who gets to be in charge of the Federal Reserve if it is a government agency? That’s because it isn’t a government agency. Do some research. The Chairman of the Federal Reserve is decided by a small committee of people who is then given the O.K. by the incumbent president. I don’t thinking the nomination of Bernanke by President Obama was a good thing. President Obama said that it was his “bold action and outside-the box thinking that has helped put the brakes on our economic freefall.” Really, we’ll see about that in 2010, if his “bold-action” and “outside the box thinking” will put the brakes on our free fall. All I am going to say is “One of us is going to be right”. Either President Obama and Bernanke are right and the recession is over, or I am right this time period will be recognized for what it really is, a depression. Meanwhile casualties in Afghanistan climb. 45 U.S. troops were killed in July, making it the deadliest month for U.S. troops since the conflict started 8 YEARS AGO. Can somebody tell me how much is this conflict costing Americans and why are we even there fighting in the first place? Because most of the people I talked to have no idea.

Saturday, 29 August 2009

Did You Know?

Did you know that "companies in the 1990s could go public with annual sales of about $25 million, while the threshold today is $100 million or more?"

Source:
Investor's Business Daily
IPO View Still Foggy But Better
8/26/2009

Wednesday, 26 August 2009

US Economic Statistics & Data Part I (8-26-09)

I have posted the most recent I could find economic statistics and data. I say, be your own economist. Take a look at the charts and graphs and see for yourself what the US economy is doing. You don't need some guy in a crusty tweed jacket with goofy glasses telling you about how the economy is. You can see for yourself and come to your own conclusions. If you see recovery, then that's great. If you don't see recovery, then that's great. It's all about what the numbers mean to YOU.

US Economic Statistics & Data Part II (8-26-09)

US Economic Statistics & Data Part III (8-26-09)

US Economic Statistics & Data Part IV (8-26-09)

US Economic Statistics & Data Part V (8-26-09)

Robert Prechter Interview on Bloomberg (5-29-09)



I am putting an old video interview of Robert Prechter back in May. As this current rally finally reaches its last legs, we'll see if he was right or not. New bull market or bear market rally? What do you think?

Tuesday, 25 August 2009

Monday, 24 August 2009

The Stock Market & The Economy Have Nothing To Do With Each Other



Real traders know that the economy and the stock market have nothing to do with each other. You trade what you can see. The market bottomed in March and has been rising ever since. The saying goes "the trend is your friend".

Sunday, 23 August 2009

The Real People Media

Weekly Wrap: Your source for stock, stock market, and stocks info


Weekly Wrap: Well, well, well the Dow Jones Industrial Average, S&P 500, and NASDAQ are all at new recovery highs. If you have been stupefied at the ever-relentless rise of the major indices with a meaningful pullback or moderate correction, you are not alone. Even the professionals are dumb-founded by what is going on in these markets. Some say, that the is the most tumultuous market environment they have ever seen in their entire careers. Trying to forecast and predict what the market will do over the next year has been nearly impossible, but not completely impossible. Back in February and March, it didn’t take a genius to figure out that the market was going to have a sizable bounce because there was so much negativity and pessimism about the markets and economy. This is how markets work. They get negative and oversold, and this is precisely when you MUST buy. And when they get giddy and overbought, this is precisely when you MUST sell. So, what do we have now. It looks like optimism about recovery is running rampant. Every mainstream media outlet is saying the recovery is around the corner and the good times are coming back. Is this true? Probably not, because you could probably make money, if you did the exact opposite of what the mainstream media says. It’s just the contrarian nature of being a good trader/investor. So, to make money, you have to be ahead of the crowd. And right now, I am starting to get a little bit uncomfortable with the meteoric rise of the markets off of the March lows. Markets never go straight up and they never go straight down forever. So you can be assured that the market will run out of steam on the upside. I want to be early in inform you that if you have long positions in the market, it may be time to start lightening up on your positions or even outright liquidation because I believe the markets probably have (maybe) another 2 months on the upside before reality hits. There isn’t going to be any recovery this fall. And for people who maybe just started to get back into the market in the last few weeks, will probably be the ones hurt the most by the coming decline. The coming decline will be swift. In the beginning, the mainstream media will say it’s just a correction and that it is constructive and healthy for the market to correct. But then the selling will start heating up on the downside, and they will ask, ”Why is the market going down, if there is a recovery on the way?” Then, the market will head lower (by then, the market will be down considerably) and they will start to doubt whether the recovery is coming. And lastly, they will realize that the recession continues and that the preceding market rise was just a bear market rally. That’s how these things go. Stay ahead of the news by watching the market. I think the market rally is definitely in its last legs now, and I am preparing to sell my long position and even start putting on short positions. Some news last week, house prices rose in July 7.2% in the US. Apparently, for four months in a row. Meanwhile, delinquency and foreclosures are still hitting brand new records every day. Is the housing market in the US hitting bottom? I don’t know, but I still think it’s too early to start thinking about buying a house. Prices have come down a lot, but if you want to be sure you are getting bargain basement prices, I would wait another 2 years. Oil prices hit $74.72 last week high. It hasn’t even been confirmed that the economy is growing in the US and oil hit back at $74. Wow! Just think where oil will be when the economy is growing at a good pace again. Say hello to triple digit oil prices again. Maybe not this year, but certainly in the next decade. Speaking of oil, natural gas is getting crushed. I have no idea why natural gas is going down some much. It hit a seven year low last week at $2.80 per mil Btu. Do people still use natural gas? Of course they do, so it makes no sense to me. But there is an opportunity there. When things get so out of favor or so low, it starts becoming an attractive situation to invest in. “Value for money”. Natural gas is “value for money”. Could it go lower, yeah, probably. But it’s pretty damn low. I’ll finish with Ben Bernanke. He likes to print money. He also likes to make us feel better by telling us “everything will be ok” because we will just “print money” if we have problems. In Jackson Hole, Wyoming, “that the U.S. is on the cusp of recovery after a long, brutal recession and the worst financial crisis since the Great Depression.” Really, this is coming from the guy who said the subprime crisis was contained. The same guy who said house prices will stabilize in early 2007. The same guy who said the economy wouldn’t experience a recession in 2007. And we are supposed to TRUST him when he says the nation is on the cusp of recovery? I would give too much credence to what that guy says, what do you think?!!

Saturday, 22 August 2009

FinancialSense.com Interviews


These are 3 good interviews from FinancialSense.com. I listen to their broadcast every weekend because they always have good guests on the show and I always learn something new every time. This weekend is particularly good because there is an interview of Jack Schwager, author of the Market Wizard books, explaining some of the things it takes to be a successful trader. Also, there is an interview with Louise Yamada, who is a well-respected technical analyst on Wall Street. That is followed by Gerald Celente, from TrendsResearch.com, who has been successful over the last 20 years at forecasting trends.

http://www.netcastdaily.com/broadcast/fsn2009-0822-2.asx
http://www.netcastdaily.com/broadcast/fsn2009-0822-3a.asx
http://www.netcastdaily.com/broadcast/fsn2009-0822-3b.asx

Friday, 21 August 2009

Chapter 11: For Athletes?!!?!?!??!

Professional athletes are not usually known for their financial prowess. So it may come as a suprise to hear that Dave Bing founded a successful steel company or Joe Montana is a partner in a successful hedge fund. The real statistics may shock you. Here are some excerpts from an article I came across:

"Similar to lottery winners, with no financial prowess or discipline, most pro athletes go completely broke in less than 10 years after retirement. In fact, 60% of retired basketball players go broke in 5, and 78% of football players in 2! Athletes are forced to sell their homes, sell their championship rings, and file for bankruptcy."

"When a 22-year old is suddenly getting pay checks in the ballpark of $500,000 every two weeks, the idea of remaining somewhat conservative while planning for the future seems ludicrous. They find themselves purchasing $10 million dollar homes, 10 cars of at least $125,000 apiece, fancy restaurants and all-night parties, not to mention the drugs, the alcohol, and the gambling that is often associated with some of these rich celebrities. They fail to realize that once the income stops, the monthly payments don’t."

"Between 60-80% of professional athlete marriages end in divorce."

"Children: NFL’s Travis Henry: 9 women, 9 children. At roughly $3000 a pop, his monthly child support payments are equivalent to what some people earn in a year."

Check out the article. It is a interesting 5 minute read. People's comments to the article are hilarious.

Source:
Cosmoloan

Follow the Money...


The opposition to the proposed health care bill is hitting a fever pitch and it looks like, for the moment, this is the biggest issue in U.S. politics, but I want to talk about something that none of the politicians (really) want you to know. Ever heard of the names Nancy Pelosi, John Boehner, Harry Reid, Dick Durbin, Lamar Alexander, or Patty Murray. No? Well, I don't blame you if you don't know the “Who's who?” in American politics, but these are the names of none other than the elected officials who are supposed to be running our government. Why am I mentioning these people? Good question. I graduated with a B.S. in Finance, so being a “finance guy” I like to follow the money. I did a little digging and I found some interesting things. Such as Nancy Pelosi (D-CA) has raised $850,477 for 2009-2010 cycle fundraising, and that one of the top 5 contributors to her campaign is Boeing ($10,000). Like John Boehner (R-OH) has raised $1,094,448 in campaign money and his four top contributors are American Financial Group, American Electric Power, Lockheed Martin, and Southern Co, with American Financial Group giving the most ($38,000). Meanwhile, Harry Reid, D-NV, received money from MGM Mirage ($137,350), Harrah's Entertainment ($74,000), Station Casinos ($71,200), and JPMorgan Chase ($61,100) contributing to a grand total of $10,930,627 in 2005-2010 cycle fundraising. Do any of you out there think there isn't a little bit of “conflict of interest” when a proposed bill that benefits any of these major companies comes into the House or Senate? I believe there is, but it speaks to a larger problem. If these corporations are contributing so much money to the politicians so that they can stay in power is it any wonder why “the people's” interest do not get represented in government these days. Look, I don't know anything about politics and I am not particularly to interested in the machinations of the political machine, but I DO know about money. I KNOW that “money talks”. So do some digging for yourself, I think you will be interested in what you find.


Don't know where to dig? I thought so. Go to http://www.opensecrets.org/. The homepage of the website will explain it all. It's a site dedicated to primarily “Following the money in Washington”. See who's getting what and how much. Want to know who's getting all the bailout money, they will tell you. Want to know who in Congress is getting the most campaign money and from whom, they will tell you. Want to know the special interests lining up to get their piece of the pie when the health care reform bill gets passed, THEY WILL TELL YOU. Take a look. http://www.opensecrets.org/

Thursday, 20 August 2009

Commentary: Your source for news, commentary, and stock info


Don't Take Yourself So Seriously...

Monday, 17 August 2009

Friday, 14 August 2009

Monday, 10 August 2009

Did You Know?

Did you know that the busiest port in 2007 was Singapore? They had 27.9 million TEUs worth of cargo come in and out of their ports. A TEU stands for twenty-foot equivalent. Wikipedia defines TEUs as "an inexact unit of cargo capacity often used to describe the capacity of container ships and container terminals. It is based on the volume of a 20-foot long intermodal container, a standard-sized metal box which can be easily transferred between different modes of transportation, such as ships, trains and trucks."

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap:How do you measure the health of the economy? In a short answer--many ways. Economists have devised many methods to ascertain the health of the national economy. One of those methods is the ISM manufacturing index. This index is "a monthly index released by the Institute of Supply Management which tracks the amount of manufacturing activity that occurred in the previous month.” Any number above 50 signals economic expansion, and any number below 50 signals economic contraction. Last week the ISM manufacturing index number was released. It was 48.9 in July, which signals the economy is still in contraction. In June the number was 44.8. So you can see the number is up from the previous month. This information was looked upon favorably by the so-called experts. I think economic reports should be taken with a grain of salt though, because they can't be revised and frequently altered. I believe what truly moves markets are human psychology and social mood. So you should attune to changes in sentiment because this is what "really" drives markets. Along with the ISM number last week, consumer spending was up 0.4% and personal income was down 1.3%. Ford reported that their July sales were up. That wouldn't be due to the "cash-for-clunkers" incentive program that the government is sponsoring, would it? The same incentive program which the Senate approved another $2 billion for and President Obama signed into law? I wonder. That's funny because I don't remember the Senate asking me if I wanted to give free money away to people to keep the car industry going. Meanwhile, GM’s sales fell19%, Chrysler’s 9%, Toyota’s 11% and Honda’s 17%. But those were less than expected. So "less bad" is the new "good"? I guess so. The market was up again last week. The S&P500 managed to eke out a 2.33% which was basically due to the short covering on Friday morning. The bears are getting run over by all the optimism. Remember, opinion doesn't mean much when it comes to making money. You can have an opinion about the market or the economy, but when it comes to making your investments you should concentrate on being able to read the actions of the "market" itself. That means learning how to read charts, recognizing what the "herd" is doing, and then reacting. This week should be pretty interesting. I have said for three weeks in a row that I expect some kind of pullback, but the market has been acting very strong. But again, I have to expect some type of correction because markets never go in a straight line up or down. After several weeks in one direction (UP), I expect the market to take a break. On the final note, there is a lot of resistance to ObamaCare. I think it’s funny how he gets these programs named after him. I mean did anybody say "BushCare" when George Bush was in office. No, because nobody liked him enough to give him nicknames. Anyway, according to a Quinnipiac University poll more than half of Americans disfavor Obama's handling of the medical problem. A poll by CNN found that 45% don't like what Obama is pushing for, and most people of over 50 oppose what he is doing. I would have to agree. Trying to push some plan in 3-4 weeks into law, without some politicians (supposedly representing the people) even reading it seems a bit rushed to me. Why not take a considerable amount of time to plan a long-term (100 years) plan for sustainable healthcare, rather than rushing something because of political pressure? Which makes me think. 4 years from now, I wonder what people are going to remember Obama for? Turning the economy around, bailing out Wall Street banks, fixing health care, solving Social Security, and quadrupling the national deficit. Hmmm.

Friday, 7 August 2009

Thursday, 6 August 2009

National Debt By Country

Alternative Media: Your source for alternative media, news, economic and stock market info

Commentary: Your source for news, commentary, and stock info

On Cash For Clunkers

Here is an excerpt from Bob Prechter's latest Elliot Wave Theorist that I think makes a good point. "After millions of Americans "took advantage" of this tax break (the government providing a tax break in the 2000s to people who bought three-ton, gas guzzling SUVs), the apparent boon was exposed as a bad deal when gasoline prices tripled and such cars fell precipitously in value while costing as much as a dollar's worth of gas for every four miles they rolled. Ironically, the taxpayers who never owned such cars paid for the subsidy. The same thing is happening with the "cash for clunkers" plan. It rewards people who have been persistently driving gas-guzzlers while sending the bill to, and thus penalizing, the socially responsible, environmentally conscious taxpayers who bought fuel-efficient cars. The worse the guzzler you have been driving, the more money the government takes from others to give to you, up to $4500. Irony attends both financial markets and government plans. Put them together-as we have witnessed throughout the financial crisis so far-and you get Kafka."

Sunday, 2 August 2009

Money, Credit and the Federal Reserve: Your source of info on banks, credit, Federal Reserve, and money

Essential: Understanding Where Money Comes From

Understanding the monetary system is a key element to understanding the way the "world works". Society now revolves around the acquisition of money to maintain or to increase one's standard of living. If you don't know how the monetary system works, then please watch the first 25 minutes of this film. If you don't know how banks actually operate, then please watch the first 25 mintues of this film. And if you don't know where money comes from, then please watch the first 25 minutes of this film. It is essential that we all understand the basis of money creation. If after watching the first 25 minutes of this film, you still don't quite fully understand how it all works then please watch it again and again until you start to really get an undersanding. When you first learned to ride a bicycle, you didn't immediately start riding like a seasoned bike rider. You probably fell down over and over, until finally it clicked and you never fell down again. Try to approach this subject in the same manner. If you don't get it all the first time, watch it again and again and again. Each time enhancing your knowledge. You will truly be awakened.

Where does the money go for the average American?


I found this pic and thought it was pretty interesting to know where people are spending their money.

Weekly Wrap: Your source for stock, stock market, and stocks info


Weekly Wrap: Well another up week for the market. Thursday saw the market make another huge push. The S&P500 is very close to breaking the 1000 level. This is right in line with my forecast for this current bear market rally. I made a previous post stating that I think the S&P500 would get to 1000-1100. It seems as though it is right on track for reaching it this fall. Now there is a lot of debate about whether this is a bear market rally or a new bull market. I would like to emphasize that it really shouldn’t be all that important to you if it is or if it isn’t? What is important is how you position yourself for whatever outcome transpires. Having a plan ready and being able to react is what is most important. I am one of the bears patiently waiting for the next leg down in the market, but I actually have all long positions because I can see the trend of the market is still up. Separating your trading/investing from your personal opinions is an essential skill to successfully making money and keeping yourself out of harm’s way if you are wrong. Fundamentally, I am very bearish on the market and the economy. I don’t see a whole lot of impetus for this “green shoots” rally that every is getting so excited about. To me, the economic data that is coming out portends to more economic malaise into 2010 or even 2011. I just don’t see the signs of improvement that some of the bulls see when they look at these economic statistics. I believe a lot of what they are seeing is based on hope. I base my opinion on facts and with a little bit of human psychology and sociology thrown in. This downturn in social mood is of a larger degree than I think most people realize. So the concurrent activity in the economy should mirror this turn down in social mood, and the one preeminent gauge of this social mood is the stock market. One could postulate that the stock market is a proxy for the general mood of society. So, the stock market is now rising; hence, the improvement in consumer sentiment numbers and somewhat less than horrible economic numbers. If you want to know where society is going before is actually gets there, the stock market should be one of the first places you look. When world markets peaked in 2007 and turned down, did anyone see the potential aftermath that occurred? The stock market did. That’s why it peaked and turned down, while everything was great and there weren’t any problems.

Saturday, 1 August 2009

Recession or Depression?


Is this a recession or a depression? Being a student a history, I have to err on the side of depression. I do not embrace that position lightly. My opinion lies upon the bedrock of historical fact-based events and social trends which may provide an outline for what we are currently experiencing and what we will see in the future. A meaningful trend that Austrian-school arm chair economists, like myself, see is a structural breakdown in the US economy largely based on a long term massive credit expansion that has now reversed course. The contraction we saw in 1929-1933 also came after a credit bubble, where people were speculating in the stock market with 10% margin and consumer credit had been rapidly rising throughout the 1920s. I believe regular business cycles end in recessions and credit cycles end in depressions. We have climbed the peak of the credit mountain, and we are now sliding down the other side. This is an excerpt from Robert Prechter’s, Conquer the Crash, “A depression is characterized in part by a persistent, sustained, deep, general decline in production. Since a decline in production reduces debtors’ means to repay and service debt, a depression supports deflation. Because both credit and production support prices for investment assets, their prices fall in a deflationary depression. As asset prices fall, people lose wealth, which reduces their ability to offer credit service debt and support production. This mix of forces is self-reinforcing.” What have we seen in this current contraction in the US economy? Rapidly falling asset prices across the board (stocks, houses, oil, art, etc.) What is different about this current depression? The Federal Reserve Board’s response to falling asset prices has been aggressive. By bailing out financial institutions and providing liquidity to banks, the Federal Reserve is trying to rekindle consumption in the US economy. Because of the recent rally in the stock market and the so-called “better than expected” economic statistics the Federal Reserve has been able to convince some that they have the power to re-inflate the economy again. I think in the end the Fed’s actions will be of little consequence because they do not have the power to move the levers of social mood. Turning around the economy is not like flipping a light switch.

Wednesday, 29 July 2009

Americans are paying 174% more for heatlh care in just 6 years!!!


According to a Bloomberg article titled, U.S. Pays $2.5 Trillion for Care Costing $912 Billion, Americans are paying outrageous amounts of money for health care. I have put some excerpts below.

"The last time a president tried to overhaul U.S. health care, Americans were spending $912 billion on the system and 40 million were uninsured. Today they’re spending $2.5 trillion and almost 50 million lack coverage."

"Health-insurance premiums for families have risen 119 percent since 1999, according to the Kaiser Family Foundation, a Menlo Park, California-based policy-research firm. Inflation has risen 28.5 percent over that period, according to the Labor Department."

"Health reform could not be more critical," Mike Duke, president of Wal-Mart Stores Inc., the nation’s largest private employer, said in a letter last month to Obama. “Reforming health care is necessary not just to improve the health of all Americans, but also to remove the burden that is crushing America’s businesses."

"If we don’t fix the spiraling cost of health care, it will have such a destructive impact on our economy that every sector of the economy will deteriorate"

Source:
Bloomberg
U.S. Pays $2.5 Trillion for Care Costing $912 Billion
July 28, 2009

Tuesday, 28 July 2009

Did You Know?


Did you know that US Senate Re-election rates for 2008 were 94% and the US House Re-election rates for 2008 were 83%? Also, did you know that based on data released by the FEC on July 17, 2009, incumbents from the Senate and House of Representatives (combined) raised $904,714,843 and challengers raised $338,662,867?


Consider the large amounts of money that US politicians are raising for their campaigns. Is it any wonder that re-election rates for incumbents are so high when so much money is involved? Also, consider where that money is coming from? Do you think its coming from regular hard working Americans each donating a little money to their favorite candidate? Did you know that 70.8% of all contributions comes from Business. I think most people have heard of the saying "Follow the money." Is this the type of political system we want?

Source:
All data from OpenSecrets.org: Money in Politics -- See Who's Giving & Who's Getting

Pandora.com

Monday, 27 July 2009

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap: Last week was another amazing week as the S&P 500 marched up another 4.13%. The S&P 500 is comprised of 500 of the top American companies so it is a broader reflection of the overall markets rather than the Dow Jones Industrial Average (DJIA). A myriad of stocks broke to new 52-highs. We had a huge short covering day again on last Thursday. I would think after two strong weeks up that we would get a sideways to down move this week. I believe that you have to be a contrarian to successfully pull money from the markets, so always leaning against the crowd is what I opt for. I do think the market has a little more legs to it, although I think the rally of the past two weeks has been ridiculous. We are going to close out the month of July this week and head into August. I don't think August will really be all that exciting. I do think that this fall is going to see some volatility come back into the markets. If you take a look at the VIX (Volatility Index), it closed at 23.09. That is the lowest close since September of 2008. There is just too much complacency from investors and traders that the economy is now on the rebound. I expect volatility to explode this fall. I think maybe the rally could last until the beginning of 2010. A lot of people try to predict market and tell you when something is going to happen. It is extremely difficult to predict the time that something is going to happen, and that isn't just for the stock market. I think that applies to everything. I think formulating a scenario (or several scenarios) about what could happen in the future by taking current events and deducing what the future trends will be is more advantageous. I think having a view (whether bullish or bearish) and then waiting for the right opportunity to trade/invest on that view will make you more successful. For example, people who are jumping up and down about the stock market's rise from the March lows proclaiming that they see "green shoots", the economic recovery is right around the corner, and the "worst is over" should not just jump in and start buying stocks recklessly. Wait for a correction to accumulate positions rather than buying stocks that are moving up fast. And for people who are stubbornly bearish who have the idea that these green shoots are weeds, the economic recovery is not going to happen, and the worst is yet to come should not start shorting or selling stocks yet until there is further evidence that the bear market rally is coming to an end. I think having a view either bullish or bearish is paramount first, but then waiting patiently to trade/invest that view will actually make you money. Look at all the bears who starting shorting in April and May, they got beat up and slaughtered in June and July. The bears might be ultimately right in the end if the market breaks the March lows and heads even lower next year, but for now they are wrong. Being right at the wrong time is still being WRONG.

Sunday, 26 July 2009

Friday, 24 July 2009

Quote of the Day


Without the negative, we would have no capacity to differentiate the positive, so that the negative is a necessary precondition to the existence of the positive and our perception of it. So it follows absolutely that one is compelled to take a positive view of the negative. Ipso facto, the negative is positive due to its positive effect in allowing us discriminate the positive from the negative. Therefore, the negative is positive. So stop whining, shut up and think positive.
-The Sage, I. Tarius
(i.e. Prepare yourself for the worst (economically and socially), so that when it comes it will not be such a big deal or even have no efffect because you have already been preparing. In fact, making provisions should be seen as a positive by affecting your own outcome positively when the storm blows in. It's all a matter out perspective about what separates negative from positive.)

Interesting....


We know where all the pain is being felt.

Wednesday, 22 July 2009

Americans Saving Again


This post is a follow up to a previous post about Americans saving again. Here is a chart of the Americans' personal savings rate.

Propaganda & Lies

I get about 10% of my news from the mainstream media. Why? Because it is all propaganda and lies. If you are trend follower like I am, then it doesn't matter what direction things are moving. I do think it is funny to hear the media talk about "green shoots" and recovery because it's just not what is happening in the majority of average americans' lives. I think this clip I just saw right now that embodies what the mainstream media has become. Wake up.

Tuesday, 21 July 2009

Americans Repaying Debt Most Since ‘52 Spurs Savings

Found an article on Bloomberg today. Maybe now they are starting to getting the idea about debt. Here are some excerpts:

"For the first time since Harry S. Truman was in the White House, Americans are paying back their debts..."

"While the proportion of consumers without jobs rose to 9.5 percent last month, household borrowing fell to 128 percent of the average family’s after-tax income in the first quarter from a record 133 percent a year earlier"

"We’ve never seen a pullback like this....We are seeing an adjustment, and it’s very painful and there’s a lot of collateral damage."

"Corporate America is going through debt rehab,” said Lonski, who’s based in New York. “The focus right now is on improving financial health and that probably will be at the expense of capital spending and hiring activity. Nothing will discourage capital spending or encourage cutbacks in staff more than much lower-than-expected sales."

"You are not going to buy a new pair of jeans if you don’t have a job yet"

Consumers "understand what they are spending more than ever," Mike Duke, chief executive officer of Wal-Mart Stores Inc., told employees and suppliers July 16 in Bentonville, Arkansas, where the world’s largest retailer is based. "This has brought on a new normal of how consumers view consuming, shopping."

Source:
Bloomberg News
Link: http://www.bloomberg.com/apps/news?pid=20601213&sid=atjMg9ctSAMo


Obama Approval Ratings Dip?


I came across an article today. The article talked about Obama's slipping approval ratings. Obama's Approval Ratings Dip? Really? Am I surprised, definitely not. I am not interested in the inner workings of politics. When politicians try to tinker in the world of finance and economics it is never a good idea. Obama was elected because the people were more concerned about the economy. If the people were more concerned with the war in Iraq and Afghanistan , John McCain would be our president today. So I am not surprised Obama's approval ratings are sliding, but my reasons have to do with social mood. I believe that social mood dictates the events in society, and not the other way around. So the fact that Obama became president at a time when society's overall mood was declining is evidence (to me) that the eventuality of his presidency will be thought of with contempt and disdain for all his actions and policies. Am I the only one who thinks what Obama has done and plans to do is completely detrimental to the US? Well, apparently not. Check out the link below. Read the article. Then take the poll at the bottom of the article. See what average Americans think about Obama's actions and policies. I think the article may not have even been giving the true feelings of people. I saw strongly disapprove of 70% on most of the poll results. You can't make this stuff up, or you could. But a poll is a poll. Nothing more, nothing less.

Source:
AOL News
Link: http://news.aol.com/article/obama-approval-ratings-dip/578736

P.S. - For more information on Obama, check out the movie, The Obama Deception.
Just watch the video below.

The Obama Deception

Sunday, 19 July 2009

Gerald Celente Interview 18 July 2009


Weekly Wrap: Your source for stock, stock market, and stocks info


Weekly Wrap: You can see that this week was a resounding attempt at reviving the continuation of the bear market rally. We had basically a three month period where the S&P essentially was flat. I had anticipated a moderate pullback because of how far and fast the market had risen from the March 6th lows, and put on a couple of short positions. A few of them got stopped out, and I covered some of the others because the market wasn't doing what it was supposed to if we were going to experience a decline. I think this week was a turning point in the this bear market rally on sentiment. A lot of well-known and staunchly bearish pundits and analysts (Nouriel Roubini and Meredith Whitney) turned quite bullish. Whitney said Goldman Sachs was a buy and Roubini predicted the end of the recession this year. I was really surprised by both of their statements, and they happened in the SAME WEEK. I respect both of their opinions, but ultimately I think they will both be wrong down the road. Just give it time. There is another thing about analysts and economists. Both have made a name for themselves (even becoming celebrities in the financial world) in the past 2 years by being bearish on companies and the economy. If the economy does have somewhat of a crack-pipe, stimulus-induced rebound because of fake money printing by the Fed and US government, they can't afford to continue to be bearish when stocks are rising and the economy gives the APPEARANCE of recovering. So, i don't blame them for turning bullish, but when the market begins to fall again. I don't think either of them will want to ingeminate their current stance when that happens. I expect a sideways to down week, next week, after a 6.97% rally for the week. Personally, I think the market move this week was rather unwarranted because the economic data isn't particularly compelling. There are some whispers that last week was options expiration and that next week the market will collapse. The idea is that the reversal to the upside this week was actually deceptive. But I heard rumors last year that the COMEX market was going to shut down because market players were going to ask for physical delivery. Didn't HAPPEN. So I tend not to put much credence to such baseless conjecture. The chart of the market will tell you everything you need to know. Look at a 5-year chart of CIT Group Inc. (CIT). All the talk this week was are they going to go bankrupt or not? Is the government going to bail them out or not? Well, it didn't start going down yesterday. It has been going down for 2 years. Bankruptcy?! Methinks, YES.

Saturday, 18 July 2009

This is what i am talking about

I saw this video and I had to post it. So you can really see the "recovery" mantra that is being touted by quasi-financial experts.
(By the way, Peter Schiff is one of the guys who said the bubble is going to burst before it actually did. I would love for the guy who said 4th quarter recovery on Sept. 30th to see his own video when we get there. The audacity to say that the economy is going to recover on Sept. 30th is just ludicrous.)

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