But, we’re interested in making money. And right now could be the best time to get into the market for a chance to both protect your existing wealth and to make money.
We’re not talking about stock markets here. Whilst there are good “value” opportunities to be had in defensive stocks, there’s another far better place to deploy some capital.
The market that really deserves your attention is gold.
The perfect storm that will drive the gold price higher
Because there is the financial equivalent of a perfect storm converging on the markets: fear of further financial catastrophe; the further printing of money by governments desperate to avoid deflation; and the looming threat of inflation coming back with a vengeance as a result of this government stimulus.
And when it hits, there’s going to be a rush of global capital into gold. The time to get in is now… ahead of this surge. Gold may well turn into the next asset bubble. If we’re going to make money from it, we want to be in it before the crowd starts pumping that bubble up.
So far, gold is perceived as what it’s best at being: the ultimate store of value. For that reason alone, it’s already starting to attract a small, but growing crowd, as Bill Bonner, points out:
“Still, the crowds are pretty thin, compared to what they will be when the bull market in gold really takes over. Then, your neighbours will be talking about gold... and telling you how much money they made in gold. That’s still ahead... when gold goes over $1,000... over $1,500... over $2,000.”
This isn’t small-time investors driving gold, though. Not yet. What we’re seeing is an influx of money from bigger institutional investors, eager to hedge portfolios with a more stable asset class. This is a fairly new development. Until recently, the bigger money had been staying out of gold.
“It’s not just the hyperactive, hot money hedge funds batting around gold anymore,” says Andrew Mickey of Prosperity Dispatch. “Now pension funds, mutual funds, and other institutional investors are betting on gold – in a big way.
“That is the big difference this time around. The big money interest hasn’t been there for decades, and it looks like that’s quickly starting to change.”
And sooner or later, when it hits the mainstream press, then there’ll be another flood of “hot money” that will continue to drive the price higher.
The big move is already under way
The move has already started, by the way. Gold is up 13% in the past month. Since it bottomed near $700 in November, gold has rallied by 33%. And it looks like it’s just getting started.
Speculators in the gold options market – amongst the smartest of market participants – are betting on gold topping $1,000 by April. They clearly see $940 as cheap. Meanwhile, Peter
Munk, Chairman of the world’s largest gold producer, Barrick Gold, said: “Do I personally believe gold will break through $1,000? It’s not a question of if, it’s a question of how soon.”
Munk sees what he calls an “unpleasant and frightening” trend of investors buying gold as protection against uncertainty in world markets. People no longer believe in the security of the US dollar and other paper currencies. Gold is seen as the only “currency” that can hold its value no matter what happens.
From a technical analysts’ view, gold is also looking good. Citigroup chartists wrote this week, “we see gold breaking further through key levels and the market appears on course to making new highs… we therefore remain unequivocally bullish on the short-, medium- and long-term outlook for gold… this useless metal that yields nothing can eventually test $2,000”.
It doesn’t really matter whether you believe we’re faced with deflation or inflation. Gold can protect you whichever happens. If we get inflation, gold will attract money. Whilst the value of everything else is eroded by inflation, gold holds its value.
If we get deflation, then governments will debase their paper currencies – as they are doing already. But sooner or later, this will reignite inflation…
Gold is a great way of protecting a portion of your wealth right now. And if money continues to flow into gold, then you could also make a very decent profit in the months ahead.
Source Frank Hemsley For The Right Side
Thursday, February 19, 2009
Wednesday, February 18, 2009
Stocks will recover long before the economy
Stocks will recover long before the economy
BY THEO CASEY
We have good and bad news. The bad news? By some bearish estimates, we face a 50% fall in global corporate profits over the next two years. The good news? Despite these facts, right now is a good… scratch that…great time to buy shares.
Earnings are only one half of the story. Prices are just as important. The FTSE 350 may have fallen 37% since the peak of the bull market in 2007, but earnings have only fallen 10% so far.
By our calculations, markets have already “priced in” significant losses. Stock markets are said to be forward-looking. This means that even though earnings data will be bad for the foreseeable future, the markets will not necessarily be so.
I believe – as we saw in the 1991 and 2000 recessions – that the stock market recovery will play out in three phases. Take a look at the chart below. It is a projection of stock market returns and corporate earnings.
The orange line represents earnings – how much money the company makes. The black line represents prices – how much money the shares make for investors.
Citigroup anticipates that share prices will bottom out and start a slow recovery in the near-term. At this point earnings will still be falling. Then, expect a mild recovery in defensive stocks.
However, in phase 3, investors will become more adventurous as earnings and the economy begin to recover. It is here that the next bull market can begin.
I see prices breaking away from earnings as more and more investors eventually see the light at the end of the recessionary tunnel. Once confidence and economic forecasts improve, so too will prices.
I believe that there is money to be made by investing in cheap, defensive, high-yield stocks. Rather than a negative, you should see the gloomy sentiment as a plus. It could well prove the best time to buy.
Stock market has been the leading indicator of every economy & industry and it haven't change to date.
BY THEO CASEY
We have good and bad news. The bad news? By some bearish estimates, we face a 50% fall in global corporate profits over the next two years. The good news? Despite these facts, right now is a good… scratch that…great time to buy shares.
Earnings are only one half of the story. Prices are just as important. The FTSE 350 may have fallen 37% since the peak of the bull market in 2007, but earnings have only fallen 10% so far.
By our calculations, markets have already “priced in” significant losses. Stock markets are said to be forward-looking. This means that even though earnings data will be bad for the foreseeable future, the markets will not necessarily be so.
I believe – as we saw in the 1991 and 2000 recessions – that the stock market recovery will play out in three phases. Take a look at the chart below. It is a projection of stock market returns and corporate earnings.
The orange line represents earnings – how much money the company makes. The black line represents prices – how much money the shares make for investors.
Citigroup anticipates that share prices will bottom out and start a slow recovery in the near-term. At this point earnings will still be falling. Then, expect a mild recovery in defensive stocks.
However, in phase 3, investors will become more adventurous as earnings and the economy begin to recover. It is here that the next bull market can begin.
I see prices breaking away from earnings as more and more investors eventually see the light at the end of the recessionary tunnel. Once confidence and economic forecasts improve, so too will prices.
I believe that there is money to be made by investing in cheap, defensive, high-yield stocks. Rather than a negative, you should see the gloomy sentiment as a plus. It could well prove the best time to buy.
Stock market has been the leading indicator of every economy & industry and it haven't change to date.
Tuesday, February 17, 2009
How long before the stock market recovers?
How long before the stock market recovers?
History and the London Business School Global Investment Returns Yearbook with investment bank Credit Suisse have suggestions
It’s the question every investor wants answered: how long will it take the stock market to recover?
Last week, professors Elroy Dimson, Paul Marsh and Mike Staunton of the London Business School offered an answer when they published their Global Investment Returns Yearbook with investment bank Credit Suisse.
History offers a patchy guide. After the 1987 crash, global investors recouped their losses in just two years. Even after the 1973–74 bear market, when the UK market fell 73% in real terms, it took the All-Share index fewer than three years to regain its previous high, though after inflation it took eight years.
Investors can draw less comfort from the Great Depression, however, when it took US stocks until 1949 to rise decisively above their 1929 pre-crash high in real terms.
London Business School took as its starting point the fact that shares have historically returned 3.5% more than cash. On this basis, the FTSE 100 has a 50% chance of regaining its previous high (6,930 in December 1999) by 2019. If dividends are included, however, there is a 50% chance of it getting back to its peak by 2014.
Marsh said: “These estimates are simply probabilities. We may be lucky: there may be a speedy rebound, and recovery may be faster than is portrayed. But there could also be a lengthy Japan-style era, in which markets do not recover for a long time.”
However, he pointed out that certain assets could help investors to regain previous highs more quickly. Investing in smaller UK companies would have given you an additional 2.3% return every year since 1955 — although of course you would have been taking a greater risk.
Similarly, investing in so-called “value” stocks — those that trade on a low multiple of their earnings, dividends, or book value — would have delivered an additional 1.5% a year.
Some of the country’s best funds managers, including Neil Woodford, who runs Invesco Perpetual’s Income and High Income funds, follow a “value” approach. For Woodford it seems to have delivered: the Income fund is up 145% over the past 10 years and his other fund is not far behind.
The report, while recognising that investors have suffered savage losses on the stock market, urges them to keep faith.
Marsh said: “Equity investors can expect to be more than 40% richer relative to investing in cash over a 10-year horizon, and twice as rich over 20 years.
“While investors should keep faith with stocks, they should not harbour fantasies of an immediate return to either previous (and, with hindsight, unrealistic) market levels, or to previous high rates of return.”
“We were spoiled by the high returns of the 1980s and 1990s, when equities seemed a sure-fire route to getting rich quickly. Today, as we look ahead, while we should expect to enrich ourselves from equities, the process is likely to be one of getting rich more slowly.”
Advisers said the report confirms investors should check they have the best assets for their attitude to risk.
From timesonline.
History and the London Business School Global Investment Returns Yearbook with investment bank Credit Suisse have suggestions
It’s the question every investor wants answered: how long will it take the stock market to recover?
Last week, professors Elroy Dimson, Paul Marsh and Mike Staunton of the London Business School offered an answer when they published their Global Investment Returns Yearbook with investment bank Credit Suisse.
History offers a patchy guide. After the 1987 crash, global investors recouped their losses in just two years. Even after the 1973–74 bear market, when the UK market fell 73% in real terms, it took the All-Share index fewer than three years to regain its previous high, though after inflation it took eight years.
Investors can draw less comfort from the Great Depression, however, when it took US stocks until 1949 to rise decisively above their 1929 pre-crash high in real terms.
London Business School took as its starting point the fact that shares have historically returned 3.5% more than cash. On this basis, the FTSE 100 has a 50% chance of regaining its previous high (6,930 in December 1999) by 2019. If dividends are included, however, there is a 50% chance of it getting back to its peak by 2014.
Marsh said: “These estimates are simply probabilities. We may be lucky: there may be a speedy rebound, and recovery may be faster than is portrayed. But there could also be a lengthy Japan-style era, in which markets do not recover for a long time.”
However, he pointed out that certain assets could help investors to regain previous highs more quickly. Investing in smaller UK companies would have given you an additional 2.3% return every year since 1955 — although of course you would have been taking a greater risk.
Similarly, investing in so-called “value” stocks — those that trade on a low multiple of their earnings, dividends, or book value — would have delivered an additional 1.5% a year.
Some of the country’s best funds managers, including Neil Woodford, who runs Invesco Perpetual’s Income and High Income funds, follow a “value” approach. For Woodford it seems to have delivered: the Income fund is up 145% over the past 10 years and his other fund is not far behind.
The report, while recognising that investors have suffered savage losses on the stock market, urges them to keep faith.
Marsh said: “Equity investors can expect to be more than 40% richer relative to investing in cash over a 10-year horizon, and twice as rich over 20 years.
“While investors should keep faith with stocks, they should not harbour fantasies of an immediate return to either previous (and, with hindsight, unrealistic) market levels, or to previous high rates of return.”
“We were spoiled by the high returns of the 1980s and 1990s, when equities seemed a sure-fire route to getting rich quickly. Today, as we look ahead, while we should expect to enrich ourselves from equities, the process is likely to be one of getting rich more slowly.”
Advisers said the report confirms investors should check they have the best assets for their attitude to risk.
From timesonline.
Sunday, February 15, 2009
The stock market, will not recover until 2011
Researchers say economic downturn may be longer than historical stock market averages suggest
by Gail MarksJarvis
Are you too optimistic or pessimistic about the economy and stock market?
If you've been encouraged by historical averages, which show the stock market rebounds after 18 months in a bear market, you might be among the people expecting a powerful and lasting surge in stocks later this year. But if you happen to be aware of a piece of research that's making the rounds in the investing profession's inner circles lately, you probably have cast aside the averages and are focused on a much grimmer picture.
Many investors are being told by market pundits and financial planners that relief may be at hand, but this new research suggests that investors who indulge in stocks now may have to be patient for longer than they assume.
"Our view is that the market doesn't recover for another two years," said Kenneth Rogoff, a Harvard economics professor and one of the authors of the research. Rogoff and Carmen Reinhart, a professor of public policy and economics at the University of Maryland, have examined financial crises throughout the world since World War II and concluded that housing, like the stock market, will not recover until 2011.
Financial crises are more severe than typical recessions, the authors said, because the financial system is the lifeblood of an economy. And the longer it fails to pump money into the system, the more the economy is damaged.
In the average financial crisis, housing declines 35 percent and doesn't recover for six years, the researchers found. The stock market, on average, declines nearly 56 percent and the downturn lasts 3.4 years.
Currently housing—measured by the Case-Shiller index—is down about 25 percent after reaching a peak in 2006. And the Standard & Poor's 500 stock index dropped 52 percent from its October 2007 high to its lowest point in November 2008. But the researchers said the severity of the current financial situation makes them think that relief remains distant.
Rogoff said that if the government does not quickly put some of the nation's largest financial institutions into a form of receivership—or short-term national control—the current situation could evolve into a crisis like Japan's or the Great Depression, with the economy rolling in and out of recession for years. Japan began a downturn in the early 1990s and has yet to recover.
A key to fixing the system when widespread banking issues are involved is to take decisive action quickly, the researchers found.
Even with that sort of action, they do not expect growth to return to typical levels for about three years.
"This is among the most serious crises," Reinhart said. "It has hit every strata of finance—the largest banks, the regional banks, and the brokerage industry as we've known it has ceased to exist. This is not like the savings and loan [failures of a generation ago], which were confined to one industry. And this is international to boot."
When a financial crisis is centered in merely one country or region of the world, other, stronger nations help with debt problems and import the distressed countries' products so the economy can strengthen. That was the case, for example, in the Asian crisis of 1997-98.
But in the current situation, financial problems reach outside the U.S. and the world economy is slowing along with ours, disrupting the ability of other nations to help the U.S. by importing products, Reinhart said.
The financial system is so deeply injured, Rogoff said, "I can't imagine robust growth when this is over."
The bailout that will be required is likely to cost the U.S. $2 trillion to $3 trillion, he said. But his research shows that the longer the government waits, the worse the economy will deteriorate and the higher the price tag.
His research shows that it is not the bailout that adds the most cost to governments in a financial crisis. It's the impact of a downward-spiraling economy.
As people lose jobs and business weakens, tax receipts fall. In the typical financial crisis, unemployment climbs 7 percentage points above where it had been before the downturn. In this case, that would put the rate above 11 percent, much higher than the current 7.6 percent.
Unemployment tends to continue to rise even while the economy is starting to stabilize and the stock market is climbing.
Despite their predictions, Reinhart and Rogoff think that with quick action, the recession will technically end late this year.
But Reinhart said the government "must bite the bullet."
To stabilize the financial system, the professors suggest the government take over banks that are insolvent on a short-term basis and then eventually sell assets to private businesses. Rogoff does not think it's possible to cure the problem with private investment initially.
by Gail MarksJarvis
Are you too optimistic or pessimistic about the economy and stock market?
If you've been encouraged by historical averages, which show the stock market rebounds after 18 months in a bear market, you might be among the people expecting a powerful and lasting surge in stocks later this year. But if you happen to be aware of a piece of research that's making the rounds in the investing profession's inner circles lately, you probably have cast aside the averages and are focused on a much grimmer picture.
Many investors are being told by market pundits and financial planners that relief may be at hand, but this new research suggests that investors who indulge in stocks now may have to be patient for longer than they assume.
"Our view is that the market doesn't recover for another two years," said Kenneth Rogoff, a Harvard economics professor and one of the authors of the research. Rogoff and Carmen Reinhart, a professor of public policy and economics at the University of Maryland, have examined financial crises throughout the world since World War II and concluded that housing, like the stock market, will not recover until 2011.
Financial crises are more severe than typical recessions, the authors said, because the financial system is the lifeblood of an economy. And the longer it fails to pump money into the system, the more the economy is damaged.
In the average financial crisis, housing declines 35 percent and doesn't recover for six years, the researchers found. The stock market, on average, declines nearly 56 percent and the downturn lasts 3.4 years.
Currently housing—measured by the Case-Shiller index—is down about 25 percent after reaching a peak in 2006. And the Standard & Poor's 500 stock index dropped 52 percent from its October 2007 high to its lowest point in November 2008. But the researchers said the severity of the current financial situation makes them think that relief remains distant.
Rogoff said that if the government does not quickly put some of the nation's largest financial institutions into a form of receivership—or short-term national control—the current situation could evolve into a crisis like Japan's or the Great Depression, with the economy rolling in and out of recession for years. Japan began a downturn in the early 1990s and has yet to recover.
A key to fixing the system when widespread banking issues are involved is to take decisive action quickly, the researchers found.
Even with that sort of action, they do not expect growth to return to typical levels for about three years.
"This is among the most serious crises," Reinhart said. "It has hit every strata of finance—the largest banks, the regional banks, and the brokerage industry as we've known it has ceased to exist. This is not like the savings and loan [failures of a generation ago], which were confined to one industry. And this is international to boot."
When a financial crisis is centered in merely one country or region of the world, other, stronger nations help with debt problems and import the distressed countries' products so the economy can strengthen. That was the case, for example, in the Asian crisis of 1997-98.
But in the current situation, financial problems reach outside the U.S. and the world economy is slowing along with ours, disrupting the ability of other nations to help the U.S. by importing products, Reinhart said.
The financial system is so deeply injured, Rogoff said, "I can't imagine robust growth when this is over."
The bailout that will be required is likely to cost the U.S. $2 trillion to $3 trillion, he said. But his research shows that the longer the government waits, the worse the economy will deteriorate and the higher the price tag.
His research shows that it is not the bailout that adds the most cost to governments in a financial crisis. It's the impact of a downward-spiraling economy.
As people lose jobs and business weakens, tax receipts fall. In the typical financial crisis, unemployment climbs 7 percentage points above where it had been before the downturn. In this case, that would put the rate above 11 percent, much higher than the current 7.6 percent.
Unemployment tends to continue to rise even while the economy is starting to stabilize and the stock market is climbing.
Despite their predictions, Reinhart and Rogoff think that with quick action, the recession will technically end late this year.
But Reinhart said the government "must bite the bullet."
To stabilize the financial system, the professors suggest the government take over banks that are insolvent on a short-term basis and then eventually sell assets to private businesses. Rogoff does not think it's possible to cure the problem with private investment initially.
Friday, February 13, 2009
Investing in a crisis 101
Statistics show that only nine out of every 100 South Africans will retire comfortably. David Crosoer, senior analyst at PPS Investments, gives us a few pointers on how we should be handling our retirement investments in 2009...
In the last few months of 2008 many South Africans will have reacted, with dismay, to the drop in the value of their savings accounts and retirement planning portfolios due to the global financial meltdown which hit both local and global stock markets.
As it might be tempting to use these events as an excuse for not saving or for making knee jerk reactions to your portfolio, like switching to less risky assets, South Africans should remember that when it comes to planning for your retirement one cannot afford to make mistakes nor be swayed by short-term fluctuations in the market.
After all, in only 40 years of work, we have to save for at least 20 years of retirement! This means that for every year that you work you need to fund at least six months of spending into your retirement planning.
Read on to see what you should be doing in 2009...
How does the crisis affect my portfolio?
The bad news will affect your assets in the short term which could be a year or two. In terms of retirement you are in it for the long-term and the markets will recover over time. It is a good time to make regular investments each month to take advantage of the cheap equity prices.
Should I make changes to my portfolio?
You might need to re-balance your investment portfolio. This typically happens when one asset class performs significantly better than another asset class making your portfolio look quite different from how it first looked when you set it up.
Rebalancing means you should sell the asset which has been outperforming and buy the asset which has underperformed. This sounds counter-intuitive, but makes sense if you want to keep your portfolio correctly positioned for your long-term goals.
However, if your portfolio was inappropriately invested before the crisis or your financial circumstances have changed you would need to talk to your financial advisor in order to make changes.
If I lose my job this year should I cash out my retirement savings?
If you currently have a company pension plan you are able to access the money if you are retrenched, fired or choose to leave your job. However, don't do it if you do not have to as you need to be aware of the tax consequences of doing so. Cashing out early means that savings cannot grow over time and you may be left facing a very difficult retirement. This same principle applies to cashing out other savings policies.
How do I know if I am saving enough each month for retirement?
You should talk to your financial advisor. There is also software you can download off the web. A simple rule of thumb is that by the time you retire you should have accumulated between 10 and 20 times your final annual income. Unfortunately, most of us will fall short of this. Statistics show that only nine out of every 100 South Africans will retire comfortably. So, start saving early or start now if you haven't thus far.
What are the tax advantages of contributing toward retirement savings?
A retirement annuity allows you to contribute 15 percent of your taxable income as a maximum tax-deductible contribution. Thus, if you earn R300�000 per year, 15 percent of this income (R45�000) per year can be used as a tax deductible contribution.
In essence you defer your tax payment on your contributions until you retire when you are taxed on the income you withdraw. This is to your advantage if your tax rate when you retire is less than your tax rate when you make your contributions, which will almost always be the case if you aren't saving enough towards retirement. Thus if you are behind on your contributions you will probably have a big advantage for saving in an annuity. Capital gains and interest earned are also not taxed with an annuity which is to your advantage.
Source
I'm not joining the crisis, find out how on future post.
In the last few months of 2008 many South Africans will have reacted, with dismay, to the drop in the value of their savings accounts and retirement planning portfolios due to the global financial meltdown which hit both local and global stock markets.
As it might be tempting to use these events as an excuse for not saving or for making knee jerk reactions to your portfolio, like switching to less risky assets, South Africans should remember that when it comes to planning for your retirement one cannot afford to make mistakes nor be swayed by short-term fluctuations in the market.
After all, in only 40 years of work, we have to save for at least 20 years of retirement! This means that for every year that you work you need to fund at least six months of spending into your retirement planning.
Read on to see what you should be doing in 2009...
How does the crisis affect my portfolio?
The bad news will affect your assets in the short term which could be a year or two. In terms of retirement you are in it for the long-term and the markets will recover over time. It is a good time to make regular investments each month to take advantage of the cheap equity prices.
Should I make changes to my portfolio?
You might need to re-balance your investment portfolio. This typically happens when one asset class performs significantly better than another asset class making your portfolio look quite different from how it first looked when you set it up.
Rebalancing means you should sell the asset which has been outperforming and buy the asset which has underperformed. This sounds counter-intuitive, but makes sense if you want to keep your portfolio correctly positioned for your long-term goals.
However, if your portfolio was inappropriately invested before the crisis or your financial circumstances have changed you would need to talk to your financial advisor in order to make changes.
If I lose my job this year should I cash out my retirement savings?
If you currently have a company pension plan you are able to access the money if you are retrenched, fired or choose to leave your job. However, don't do it if you do not have to as you need to be aware of the tax consequences of doing so. Cashing out early means that savings cannot grow over time and you may be left facing a very difficult retirement. This same principle applies to cashing out other savings policies.
How do I know if I am saving enough each month for retirement?
You should talk to your financial advisor. There is also software you can download off the web. A simple rule of thumb is that by the time you retire you should have accumulated between 10 and 20 times your final annual income. Unfortunately, most of us will fall short of this. Statistics show that only nine out of every 100 South Africans will retire comfortably. So, start saving early or start now if you haven't thus far.
What are the tax advantages of contributing toward retirement savings?
A retirement annuity allows you to contribute 15 percent of your taxable income as a maximum tax-deductible contribution. Thus, if you earn R300�000 per year, 15 percent of this income (R45�000) per year can be used as a tax deductible contribution.
In essence you defer your tax payment on your contributions until you retire when you are taxed on the income you withdraw. This is to your advantage if your tax rate when you retire is less than your tax rate when you make your contributions, which will almost always be the case if you aren't saving enough towards retirement. Thus if you are behind on your contributions you will probably have a big advantage for saving in an annuity. Capital gains and interest earned are also not taxed with an annuity which is to your advantage.
Source
I'm not joining the crisis, find out how on future post.
Thursday, February 12, 2009
Beware of Market Forecasting
Utah Investors: Beware of Market Forecasting
By Dave Young, President of Paragon Wealth Management
There’s no shortage of self-proclaimed market prophets in Utah and throughout the nation. You can find them in the investment magazines, newspapers or CNBC. Although they can be entertaining, they provide no real investment value. They do not help anyone make money. In fact, investors who follow them are more likely to lose money than to gain it.
The way the forecasting game works is that the market guru, seer, pundit or executive continually makes forecasts in an attempt to gain public attention. By sheer luck maybe half of these predictions are proven right-meaning that at least half of them are wrong. On the occasions when the forecast turns out to be correct, the forecaster plays it up. Those many forecasts that don’t pan out (and those many investors who are financially hurt by them) are never spoken of again. In truth, you’re much more likely to get an accurate prediction of the future by listening to the weather forecasters. At least they inflict less damage when they’re wrong.
Yet despite mountains of data that show how ineffective the celebrity market forecasters are, they continue to make their predictions and many unfortunate people continue to base their financial decisions on shoddy, unproven advice.
Market professionals are not alone in their inability to forecast market behavior. Economists do just as poorly. Every six months the Wall Street Journal prints the results of a survey of leading economists who predict the level and direction of interest rates for the coming six months. 55 high profile economists currently participate in this semiannual forecast. You’d think such prestigious economists in such a high profile newspaper would know what they’re talking about, right? Nope.
If they’d just blindly guessed they’d have a 50/50 chance, but their actual educated predictions turn out to be much worse. And these are the best the industry has to offer!
So if forecasts are a waste of time then what does work? I am convinced that investors will only succeed when they are able to remove emotion from the investment process. Gut feelings are not a reliable investment strategy-even the gut feelings of so-called experts.
Source
In any investment decisions you'll make always have a plan b.
By Dave Young, President of Paragon Wealth Management
There’s no shortage of self-proclaimed market prophets in Utah and throughout the nation. You can find them in the investment magazines, newspapers or CNBC. Although they can be entertaining, they provide no real investment value. They do not help anyone make money. In fact, investors who follow them are more likely to lose money than to gain it.
The way the forecasting game works is that the market guru, seer, pundit or executive continually makes forecasts in an attempt to gain public attention. By sheer luck maybe half of these predictions are proven right-meaning that at least half of them are wrong. On the occasions when the forecast turns out to be correct, the forecaster plays it up. Those many forecasts that don’t pan out (and those many investors who are financially hurt by them) are never spoken of again. In truth, you’re much more likely to get an accurate prediction of the future by listening to the weather forecasters. At least they inflict less damage when they’re wrong.
Yet despite mountains of data that show how ineffective the celebrity market forecasters are, they continue to make their predictions and many unfortunate people continue to base their financial decisions on shoddy, unproven advice.
Market professionals are not alone in their inability to forecast market behavior. Economists do just as poorly. Every six months the Wall Street Journal prints the results of a survey of leading economists who predict the level and direction of interest rates for the coming six months. 55 high profile economists currently participate in this semiannual forecast. You’d think such prestigious economists in such a high profile newspaper would know what they’re talking about, right? Nope.
If they’d just blindly guessed they’d have a 50/50 chance, but their actual educated predictions turn out to be much worse. And these are the best the industry has to offer!
So if forecasts are a waste of time then what does work? I am convinced that investors will only succeed when they are able to remove emotion from the investment process. Gut feelings are not a reliable investment strategy-even the gut feelings of so-called experts.
Source
In any investment decisions you'll make always have a plan b.
Wednesday, February 11, 2009
Some Fundamental analysis
A way to value the worth of a company's assets
How do you value a junior resource company? You could argue two points – one is that the stock is worth whatever it’s trading. Even if a company has 1 million ounces of gold or 100 million pounds of zinc or whatever, if the stock is trading at 10 cents, it’s worth 10 cents.
One of the greatest tools the industry created for itself this cycle, was the valuation for “pounds in the ground”. Basically, investors can take the market capitalization of a company with a 43-101 compliant resource, and divide that by the number of ounces, pounds, kilos – whatever – to get a value per “pound in the ground”.
As an example, if ABC company has 50 million shares out and trades at $1, with 1 million ounces of proven gold in the ground, then it trades at $50 per ounce. You compare that number against its peer group, and if ABC Company is below the average, then all other factors being equal (and they never are) the stock is considered cheap. If it’s above the average, it’s expensive.
As a real life example, Canaccord Capital did this calculation for a list of copper companies they cover. Their research found the average value per pound in the ground of compliant copper resources was 1.18 cents, with a range of -.30 cents (meaning the company was trading below the value of the cash in the treasury and the copper was free) to 4.48 cents per pound.
A much more simple calculation came out a few years ago that has been widely adopted by investors. I first heard it from one of the best mining entrepreneurs ever, Robert Friedland, when talking about his Oyu Tolgoi deposit in Mongolia. He said the company – Ivanhoe Mines - should get 10% of the value in the ground in his stock. (I don’t know if he was the first or not but that’s where I heard it first.)
So if the gross metal value of a (43-101 compliant) resource is $1 billion, the market cap of the company should be $100 million.
This is actually easy to calculate, thanks to www.kitco.com – or at www.caseyresearch.com . They have an online calculator in which you just
1. input the grades on the resource from the press release, and it tells you what the value per tonne is.
2. Multiply it by the tonnage (you have to do that yourself) in the press release and PRESTO – gross metal value.
3. Shift the decimal point over 1 spot to get 10% of the value.
4. Divide by the amount of shares outstanding and you get what the price of the stock SHOULD be.
Lets take a real case example. Donner Metals (DON-TSXv) just announced their first resource calculation for a developing zinc project in Quebec. Here’s what the press release said:
DONNER METALS LTD.-INITIAL BRACEMAC-MCLEOD NI43-101 INDICATED RESOURCE: 3,648,000 TONNES AT 11.09% ZINC, 1.55% COPPER, 31.34 G/T SILVER AND 0.48 G/T GOLD.
Then I go here - www.kitco.com/pop_windows/kitcorockcalc.html - and insert those values into the chart, and I get a value of $201.05/tonne.
Multiply that by the 3,648,000 tonnes and you get a gross metal value, according to Kitco, of roughly $733,440,000. So Donner should have a Kitco-calculated market cap of $73,344,400. But they only own 35% of the deposit, so that, again according to Kitco, values them at $25,670,400. Divide that by the 44 million shares out, and you get 58 cents.
So by the 10% rule and the Kitco calculation, the stock should trade at 55 cents. But it’s 12 cents, and in this market I would suggest 55 cents is a little aggressive. However, the 10% rule does give investors a benchmark to decide in their own mind what value is.
The message is – you can do your own research, quite easily, to determine whether a company’s stock price is under-, fairly-, or over-valued. Use the free internet tools available to you and use your own judgment.
Gord Zelko, Publisher
Source
Fundamental & Technical analysis in the Stock Market are two different things but it will be great if they showing the same signal (buy or sell).
How do you value a junior resource company? You could argue two points – one is that the stock is worth whatever it’s trading. Even if a company has 1 million ounces of gold or 100 million pounds of zinc or whatever, if the stock is trading at 10 cents, it’s worth 10 cents.
One of the greatest tools the industry created for itself this cycle, was the valuation for “pounds in the ground”. Basically, investors can take the market capitalization of a company with a 43-101 compliant resource, and divide that by the number of ounces, pounds, kilos – whatever – to get a value per “pound in the ground”.
As an example, if ABC company has 50 million shares out and trades at $1, with 1 million ounces of proven gold in the ground, then it trades at $50 per ounce. You compare that number against its peer group, and if ABC Company is below the average, then all other factors being equal (and they never are) the stock is considered cheap. If it’s above the average, it’s expensive.
As a real life example, Canaccord Capital did this calculation for a list of copper companies they cover. Their research found the average value per pound in the ground of compliant copper resources was 1.18 cents, with a range of -.30 cents (meaning the company was trading below the value of the cash in the treasury and the copper was free) to 4.48 cents per pound.
A much more simple calculation came out a few years ago that has been widely adopted by investors. I first heard it from one of the best mining entrepreneurs ever, Robert Friedland, when talking about his Oyu Tolgoi deposit in Mongolia. He said the company – Ivanhoe Mines - should get 10% of the value in the ground in his stock. (I don’t know if he was the first or not but that’s where I heard it first.)
So if the gross metal value of a (43-101 compliant) resource is $1 billion, the market cap of the company should be $100 million.
This is actually easy to calculate, thanks to www.kitco.com – or at www.caseyresearch.com . They have an online calculator in which you just
1. input the grades on the resource from the press release, and it tells you what the value per tonne is.
2. Multiply it by the tonnage (you have to do that yourself) in the press release and PRESTO – gross metal value.
3. Shift the decimal point over 1 spot to get 10% of the value.
4. Divide by the amount of shares outstanding and you get what the price of the stock SHOULD be.
Lets take a real case example. Donner Metals (DON-TSXv) just announced their first resource calculation for a developing zinc project in Quebec. Here’s what the press release said:
DONNER METALS LTD.-INITIAL BRACEMAC-MCLEOD NI43-101 INDICATED RESOURCE: 3,648,000 TONNES AT 11.09% ZINC, 1.55% COPPER, 31.34 G/T SILVER AND 0.48 G/T GOLD.
Then I go here - www.kitco.com/pop_windows/kitcorockcalc.html - and insert those values into the chart, and I get a value of $201.05/tonne.
Multiply that by the 3,648,000 tonnes and you get a gross metal value, according to Kitco, of roughly $733,440,000. So Donner should have a Kitco-calculated market cap of $73,344,400. But they only own 35% of the deposit, so that, again according to Kitco, values them at $25,670,400. Divide that by the 44 million shares out, and you get 58 cents.
So by the 10% rule and the Kitco calculation, the stock should trade at 55 cents. But it’s 12 cents, and in this market I would suggest 55 cents is a little aggressive. However, the 10% rule does give investors a benchmark to decide in their own mind what value is.
The message is – you can do your own research, quite easily, to determine whether a company’s stock price is under-, fairly-, or over-valued. Use the free internet tools available to you and use your own judgment.
Gord Zelko, Publisher
Source
Fundamental & Technical analysis in the Stock Market are two different things but it will be great if they showing the same signal (buy or sell).
Tuesday, February 10, 2009
Recall Great Depression
Reno-area residents recall Great Depression
By SUSAN SKORUPA
RENO, Nev.—Some Nevadans who lived through it called it the Great Depression, others just Hard Times.
People worldwide mark the beginning of the Depression of the 1930s with the U.S. stock market crash of Oct. 27, 1929.
By the time Franklin D. Roosevelt took office as president three years later, nearly one-third of America's non-farm work force was unemployed and the gross national product had fallen to half of its 1929 level. Unemployment nationwide reached 25 percent in the darkest days before economic recovery late in the decade; poorer neighborhoods were even harder hit.
Adults who were children during that era recall family sacrifices and what it was like to do without. Young as they were, the hard times mostly just seemed like the way things were. People helped each other, and a quarter was real money.
Vernon Eaton of Reno was born in June 1929, just months before the stock market crash.
"By the time I got under way, the Depression was under way," he said. "The older I got, the worse the Depression got."
Eaton never knew his mom; she was admitted to a state hospital in Raleigh, N.C., when he was a baby and died when he was 10. An aunt helped raise him and his brother, Lloyd, in the rural South. Meanwhile, Eaton's dad, Robert, traveled around for jobs trimming trees in Missouri or working the wheat harvest in Kansas. When Robert Eaton ended up in Denver in 1930, he sent money home to have his sons join him.
In
Advertisement
Denver, "we lived in a little converted chicken house until 1934. A long wooden building," Vernon Eaton said.
"Dad worked for society people as a handyman. He averaged $4 a day, which was top money in the Depression," he said.
Margie Allen got married at age 17 in 1936 to a man who drove a truck and earned $25 a week. She and her mother and brother thought her new husband was a millionaire. Now there was money where before there had been almost none.
She grew up in San Francisco. Allen's father already had left the family.
"I never thought much about the Depression. That's the way we started life," said Allen.
Allen doesn't recall where the money came from that put food on the table, but the family never went hungry.
"I remember we did not have new shoes until the sole was flopping and came off," she said.
At the grocer's, Allen's mother would ask for 15-cents worth of soup vegetables and get an onion and some greens. A butcher would give them soup bones or sell them for a few pennies.
Allen remembers seeing Oklahoma residents coming into California fleeing the Dust Bowl. As little as Allen and her family had, the immigrants had even less.
"The stories they told were unbelievable, so we didn't give much thought to how we were," she said.
Eddie Scott was a grade-school-age kid living in rural Louisiana during the 1930s. He heard his elders talk about what life was like before the Depression when people bought things on credit and had new farm equipment.
Then all at once things changed. People didn't get up-to-the-minute news or economic forecasts to keep them informed.
"They were in the dark. Someone would say, 'You can't get in the bank.' When it fell, it fell," Scott said of the economy.
"Now when it really got down on the ground, you couldn't find nothing. No jobs, no food. You couldn't get things on credit no more," he said.
There were no refrigerators or freezers. Farmers learned to manage what they grew and ate. They kept hogs, chickens, ducks and geese for meat. They made lard from pork fat. Scott had an uncle who made and sold syrup, which replaced sugar. Another man in the community had a mill to grind corn.
Farm families had gardens, Scott said. And most people had some connection to someone who lived on a farm and grew food.
"There was a lot of bartering going on in those days. ... even paying the doctor with chickens," Scott said.
Jobs were few. For children and teenagers, the only way to make a few cents was to do farm work. By the early 1940s, Scott was making 50 cents a day doing field work. His older brother, who was married, earned 75 cents a day.
"We were delighted to get that," he said. "That went on a long time until I got up to a dollar a day. That's how we grew up and out of that Depression. We're talking about adults getting a dollar a day."
Donal Turner's mother was a waitress in Morgantown, W. Va. He was born there in 1921, his sister four years later. His father abandoned the family about then and his grandparents raised him on their 15-acre farm until he was about 9.
"I hardly knew what money looked like," he said. "It was a poverty-stricken area."
In 1929, Turner's mother, who owned a restaurant by then, took him on a vacation. He stayed with his mother and sister after that. One morning, his mother went to the bank to make a deposit and found a line of customers. A note on the door said the bank was closed due to lack of funds.
"By then I had a stepfather. He decided to sell and move west," Turner said. "We ran out of gas and money in Battle Mountain," Turner said.
The sheriff filled their car's tank with gas and gave the family enough money to get to Reno.
They were headed to California, but in Reno a police officer told them his stepfather could get a job washing dishes at the Riverside Hotel and a wrecker would buy the car. He helped them find a house to rent.
"The next day, Dad went to the Riverside and started washing dishes for $1 a day; he sold the car for $20 and rented a five-bedroom house for $15 a month," Turner said.
Turner and his sister attended school, his mother took in laundry. Turner mowed lawns and earned quarters running animals off the runway at the Reno airport.
His parents bought two lots in Sparks for $25 each, and Turner built a house there when he was 15.
"We moved in. Mom raised goats and sold the milk," he said. "The railroad was doing good then. In the late 1930s, Mom opened a restaurant across from the round house and a lot of people from the railroad ate there."
Norma Washington was born on a little family farm in Arkansas and was a little girl in the mid-1930s. Growing up, she said, "we must have been very poor, but it did not seem like it."
The family raised food and Washington's mother canned fruits and vegetables, and dried onions, peas and beans. They had hogs for meat and cows for milk and butter.
"I never remember being without food," she said.
Source
Are we in for another depression? Anyway I'm not joining this depression I'm not even joining the recession. Find out how on future post.
By SUSAN SKORUPA
RENO, Nev.—Some Nevadans who lived through it called it the Great Depression, others just Hard Times.
People worldwide mark the beginning of the Depression of the 1930s with the U.S. stock market crash of Oct. 27, 1929.
By the time Franklin D. Roosevelt took office as president three years later, nearly one-third of America's non-farm work force was unemployed and the gross national product had fallen to half of its 1929 level. Unemployment nationwide reached 25 percent in the darkest days before economic recovery late in the decade; poorer neighborhoods were even harder hit.
Adults who were children during that era recall family sacrifices and what it was like to do without. Young as they were, the hard times mostly just seemed like the way things were. People helped each other, and a quarter was real money.
Vernon Eaton of Reno was born in June 1929, just months before the stock market crash.
"By the time I got under way, the Depression was under way," he said. "The older I got, the worse the Depression got."
Eaton never knew his mom; she was admitted to a state hospital in Raleigh, N.C., when he was a baby and died when he was 10. An aunt helped raise him and his brother, Lloyd, in the rural South. Meanwhile, Eaton's dad, Robert, traveled around for jobs trimming trees in Missouri or working the wheat harvest in Kansas. When Robert Eaton ended up in Denver in 1930, he sent money home to have his sons join him.
In
Advertisement
Denver, "we lived in a little converted chicken house until 1934. A long wooden building," Vernon Eaton said.
"Dad worked for society people as a handyman. He averaged $4 a day, which was top money in the Depression," he said.
Margie Allen got married at age 17 in 1936 to a man who drove a truck and earned $25 a week. She and her mother and brother thought her new husband was a millionaire. Now there was money where before there had been almost none.
She grew up in San Francisco. Allen's father already had left the family.
"I never thought much about the Depression. That's the way we started life," said Allen.
Allen doesn't recall where the money came from that put food on the table, but the family never went hungry.
"I remember we did not have new shoes until the sole was flopping and came off," she said.
At the grocer's, Allen's mother would ask for 15-cents worth of soup vegetables and get an onion and some greens. A butcher would give them soup bones or sell them for a few pennies.
Allen remembers seeing Oklahoma residents coming into California fleeing the Dust Bowl. As little as Allen and her family had, the immigrants had even less.
"The stories they told were unbelievable, so we didn't give much thought to how we were," she said.
Eddie Scott was a grade-school-age kid living in rural Louisiana during the 1930s. He heard his elders talk about what life was like before the Depression when people bought things on credit and had new farm equipment.
Then all at once things changed. People didn't get up-to-the-minute news or economic forecasts to keep them informed.
"They were in the dark. Someone would say, 'You can't get in the bank.' When it fell, it fell," Scott said of the economy.
"Now when it really got down on the ground, you couldn't find nothing. No jobs, no food. You couldn't get things on credit no more," he said.
There were no refrigerators or freezers. Farmers learned to manage what they grew and ate. They kept hogs, chickens, ducks and geese for meat. They made lard from pork fat. Scott had an uncle who made and sold syrup, which replaced sugar. Another man in the community had a mill to grind corn.
Farm families had gardens, Scott said. And most people had some connection to someone who lived on a farm and grew food.
"There was a lot of bartering going on in those days. ... even paying the doctor with chickens," Scott said.
Jobs were few. For children and teenagers, the only way to make a few cents was to do farm work. By the early 1940s, Scott was making 50 cents a day doing field work. His older brother, who was married, earned 75 cents a day.
"We were delighted to get that," he said. "That went on a long time until I got up to a dollar a day. That's how we grew up and out of that Depression. We're talking about adults getting a dollar a day."
Donal Turner's mother was a waitress in Morgantown, W. Va. He was born there in 1921, his sister four years later. His father abandoned the family about then and his grandparents raised him on their 15-acre farm until he was about 9.
"I hardly knew what money looked like," he said. "It was a poverty-stricken area."
In 1929, Turner's mother, who owned a restaurant by then, took him on a vacation. He stayed with his mother and sister after that. One morning, his mother went to the bank to make a deposit and found a line of customers. A note on the door said the bank was closed due to lack of funds.
"By then I had a stepfather. He decided to sell and move west," Turner said. "We ran out of gas and money in Battle Mountain," Turner said.
The sheriff filled their car's tank with gas and gave the family enough money to get to Reno.
They were headed to California, but in Reno a police officer told them his stepfather could get a job washing dishes at the Riverside Hotel and a wrecker would buy the car. He helped them find a house to rent.
"The next day, Dad went to the Riverside and started washing dishes for $1 a day; he sold the car for $20 and rented a five-bedroom house for $15 a month," Turner said.
Turner and his sister attended school, his mother took in laundry. Turner mowed lawns and earned quarters running animals off the runway at the Reno airport.
His parents bought two lots in Sparks for $25 each, and Turner built a house there when he was 15.
"We moved in. Mom raised goats and sold the milk," he said. "The railroad was doing good then. In the late 1930s, Mom opened a restaurant across from the round house and a lot of people from the railroad ate there."
Norma Washington was born on a little family farm in Arkansas and was a little girl in the mid-1930s. Growing up, she said, "we must have been very poor, but it did not seem like it."
The family raised food and Washington's mother canned fruits and vegetables, and dried onions, peas and beans. They had hogs for meat and cows for milk and butter.
"I never remember being without food," she said.
Source
Are we in for another depression? Anyway I'm not joining this depression I'm not even joining the recession. Find out how on future post.
Monday, February 9, 2009
Women's Basketball and the Stock Market
Rob McCurdy: Girls hoops 'stock market' hard to predict this season
By ROB MCCURDY
Bears and bulls. Highs and lows. Gains and losses.
Advertisement
Mirroring the volatile Dow Jones ticker and the wildly fluctuating stock market, it's been an unpredictable girls basketball scene this season.
The business show experts tell us to buy low and sell high.
Guess that means I should have sold Mansfield Senior after its 69-55 win over Madison. The Tygers haven't scored more than 41 points since.
Guess that means I should have bought Clear Fork before it upset Mansfield Senior and Orrville in the last week.
It's been a tough market to figure this year. But with three weeks left in the regular season, here's some five-star analysis of where it's at right now. Of course, all could change on the next trading day.
Blue Chip Stocks
Bucyrus is the preferred stock in the area. The Redmen count among their assets a pair of 1,000-point scorers in Chelsea Hawkins and Kelsee Rehm, plus a roster filled with experienced seniors.
Colonel Crawford is looking bullish, but it has yet to beat a team with a better record than itself, so there could be a glass ceiling.
Loudonville and Crestview could be the area's only conference champions as both control their own destiny. The Redbirds have won seven of eight, while the Cougars are on a six-game streak.
Falling Stocks
The Tygers have lost four straight, but they're being taxed at the offensive end.
"We've got to start finding our scoring punch back," Senior High coach Todd Krill said Sunday night. "I think we're playing good defense. We're holding teams down, but we're way down on our end.
"We've got time and hopefully we'll get better before the tournament."
The Crimson Flashes' futures look bright since the roster is dominated by underclassmen, but like any start-ups there are rough patches. Willard has lost four of its last six heading into a game with state-ranked Tiffin Columbian.
Wynford was 7-3. Today the Royals are 8-7. While there's no shame in losing to Carey, Colonel Crawford and Bucyrus, a one-point loss at Buckeye Central was a day when the bear got them.
"I think we're trying to improve as we head to the tournament," Wynford coach Amy Taylor-Sheldon said. "I think we need to find kids to be more consistent ... I have to be more consistent, too."
Ontario reflects the up-and-down market. Three straight wins, three straight losses, three more wins, three losses in four, it's been one of those years for the Warriors.
Rising Stocks
After starting the season 2-5, Plymouth rolled off seven consecutive wins. If Tuesday's game at Crestview ends six seconds sooner, the streak might be up to eight.
"We start three sophomores. We'll figure it out," first-year coach Scott Speicher said. "The kids play hard ... that's the big thing."
Shelby's net worth was its lowest when it lost 67-46 at Willard to fall to 5-8. Since that low-water mark, the Whippets have ripped off four wins in a row to go over .500 for the first time since winning their opener. Now that's a big board rally.
Clear Fork's volatility is off the charts. The Colts lose to Lexington and follow it by drubbing a decent Wooster team. They drop tough ones to Madison and Ashland, then knock off Mansfield Senior. After getting blown out against West Holmes, they go to Orrville and pull off the upset of the Ohio Cardinal Conference season.
Gilead Christian is hardly a penny stock, but its price took a tumble when it didn't look very good in losing at St. Peter's in mid-January. Since then, the Eagles have won seven in a row, albeit against soft competition.
rmccurdy@nncogannett.com 419-521-7241
Source
I wonder why girls basketball?
By ROB MCCURDY
Bears and bulls. Highs and lows. Gains and losses.
Advertisement
Mirroring the volatile Dow Jones ticker and the wildly fluctuating stock market, it's been an unpredictable girls basketball scene this season.
The business show experts tell us to buy low and sell high.
Guess that means I should have sold Mansfield Senior after its 69-55 win over Madison. The Tygers haven't scored more than 41 points since.
Guess that means I should have bought Clear Fork before it upset Mansfield Senior and Orrville in the last week.
It's been a tough market to figure this year. But with three weeks left in the regular season, here's some five-star analysis of where it's at right now. Of course, all could change on the next trading day.
Blue Chip Stocks
Bucyrus is the preferred stock in the area. The Redmen count among their assets a pair of 1,000-point scorers in Chelsea Hawkins and Kelsee Rehm, plus a roster filled with experienced seniors.
Colonel Crawford is looking bullish, but it has yet to beat a team with a better record than itself, so there could be a glass ceiling.
Loudonville and Crestview could be the area's only conference champions as both control their own destiny. The Redbirds have won seven of eight, while the Cougars are on a six-game streak.
Falling Stocks
The Tygers have lost four straight, but they're being taxed at the offensive end.
"We've got to start finding our scoring punch back," Senior High coach Todd Krill said Sunday night. "I think we're playing good defense. We're holding teams down, but we're way down on our end.
"We've got time and hopefully we'll get better before the tournament."
The Crimson Flashes' futures look bright since the roster is dominated by underclassmen, but like any start-ups there are rough patches. Willard has lost four of its last six heading into a game with state-ranked Tiffin Columbian.
Wynford was 7-3. Today the Royals are 8-7. While there's no shame in losing to Carey, Colonel Crawford and Bucyrus, a one-point loss at Buckeye Central was a day when the bear got them.
"I think we're trying to improve as we head to the tournament," Wynford coach Amy Taylor-Sheldon said. "I think we need to find kids to be more consistent ... I have to be more consistent, too."
Ontario reflects the up-and-down market. Three straight wins, three straight losses, three more wins, three losses in four, it's been one of those years for the Warriors.
Rising Stocks
After starting the season 2-5, Plymouth rolled off seven consecutive wins. If Tuesday's game at Crestview ends six seconds sooner, the streak might be up to eight.
"We start three sophomores. We'll figure it out," first-year coach Scott Speicher said. "The kids play hard ... that's the big thing."
Shelby's net worth was its lowest when it lost 67-46 at Willard to fall to 5-8. Since that low-water mark, the Whippets have ripped off four wins in a row to go over .500 for the first time since winning their opener. Now that's a big board rally.
Clear Fork's volatility is off the charts. The Colts lose to Lexington and follow it by drubbing a decent Wooster team. They drop tough ones to Madison and Ashland, then knock off Mansfield Senior. After getting blown out against West Holmes, they go to Orrville and pull off the upset of the Ohio Cardinal Conference season.
Gilead Christian is hardly a penny stock, but its price took a tumble when it didn't look very good in losing at St. Peter's in mid-January. Since then, the Eagles have won seven in a row, albeit against soft competition.
rmccurdy@nncogannett.com 419-521-7241
Source
I wonder why girls basketball?
Friday, February 6, 2009
Market Update from TraderPlanet.com
Daily Market Update by K. Klombies, TraderPlanet.com
Kevin Klombies , TraderPlanet.com
We have written on many occasions that falling interest rates are a positive for equity prices. The twist is, however, that the reason interest rates are falling is often perceived as a negative. In other words while lower yields help to expand valuations (i.e. price to earnings multiples) a concurrent recession will do enough damage to earnings to create a downward tilt for the major stock market indices.
The point is that falling interest rates are actually a positive even though for the past decade the equity markets have been trending inversely to the bond market.
The chart at below helps- we hope- to explain. The chart compares the U.S. 30-year T-Bond futures with the S&P 500 Index (SPX) futures from early 2007 to the present time period.
The chart shows that rising bond prices go with falling equity prices. The argument would be that it is not rising bond prices that is the negative but rather the reason that bond prices are on the rise. A collapsing financial system that pushes investors into the safety of Treasuries is hardly the back drop for a vibrant stock market.
Below we return to a chart comparison that we have featured in these pages on many occasions. The chart shows 10-year Japanese (JGB) bond futures and the ratio between Japan's Nikkei 225 Index and the S&P 500 Index.
The basic point here is that Japan's economy tipped over the edge following the asset price bubble that peaked in early 1990. As Japanese growth slowed the trend for Japanese bond prices turned positive and as Japanese bond prices trended upwards the Nikkei began to underperform the SPX. Fair enough.
The trend for Japanese bond price has actually been fairly flat through the past decade as the Nikkei/SPX ratio has pushed back and forth through roughly 10:1. One of our recurring thoughts is that one of these days... after close to 20 years of consolidation... the Japanese economy is going to kick back into gear and when this happens 10-year JGB yields are going to push back above 2.0% (compared to 1.3% at present) which will initiate a multi-year period of relative strength by the Nikkei 225 Index. In the days to come if JGB yields get anywhere close to 2.0% we will start to ramp up our 'pro-Japan' commentary.
Equity/Bond Markets
Before moving on we will finish off our page 1 thoughts.
We have yet to see or read about any markets trend over the past few years that is perceived to be a positive for Japan. If the yen is weak it is because higher returns are available elsewhere. If the yen is strong then exporters' profits will be hurt. If commodity prices are strong and rising then Japanese profits will be squeezed and if commodity prices are weaker then cyclical growth has slowed which is an even greater negative. If interest rates are falling this means that economic growth is negative and if interest rates are rising... then ostensibly this will slow Japan's economy.
Our view is that the one thing that has to happen to signal the start of a sustainable economic recovery for Japan is a rise above 2% by 10-year Japanese yields. If an economy is going to escape from deflation then interest rates have to rise because if they don't... then deflation is still the issue. As an aside this may in fact be somewhat relevant for the U.S. In December 10-year Treasury yields touched down to 2.1% which, we will argue, is very close to the '2.0%' level. If yields move below 2.0% in the days to come then it will likely mean that the U.S. has shifted into a state of deflation and we would argue that as long as yields remain below 2.0% it likely makes sense to look for growth opportunities in the equity markets 'elsewhere'. As long as yields remain above 2.0%, however, we can justify our focus on the U.S. equity markets.
Below we show two chart comparisons of the S&P 500 Index (SPX) and U.S. 30-year T-Bond futures. The chart at top right is from 1999- 2000 and... it has been scaled upside down. This one is going to hurt.
We show the same comparison from the present day below.
The argument is that 2009 is something like the inverse or opposite of 2000. In early 2000 the bond market bottomed and turned higher even as individuals scrambled into an equity market that they had to know was egregiously valued while in 2009 the bond market may have peaked as investors have moved strongly away from an equity market that by most measures offers substantial value.
Every now and then we do an informal survey of a few brokers that we know who have been in the business for close to 30 years. The question that we ask is, 'What is the one trade that, if you brought it to your best clients, they would not agree to do?'. The odd thing is that we are constantly surprised by the answers that we receive. In mid-2007, for example, the overwhelming response was that the one thing that clients would not do is sell bank shares. At year end 2008 the answer was... buy any stock. Not buy GM, Citigroup, Fannie Mae, or even General Electric but... not buy ANY stock. The one thing that retail clients would simply not do was buy any stock in December of 2008. Given our contrary nature... we couldn't help but feel quite bullish.
In any event... we turned the comparison below upside down so that the trend would move in the same direction as the current trend. If the TBonds continue to decline and the comparison holds we could see the SPX push up to the moving average lines over the next month or two and then potentially go through a slump into the second half.
The argument is that falling bond prices should be a positive for equities but the process of building the next bull market may take a few months given the current state of investor pessimism and/or apathy.
Super Bowl and Stock Market...How about Women's Basketball to Stock Market?
Watch for it on the next post.
Kevin Klombies , TraderPlanet.com
We have written on many occasions that falling interest rates are a positive for equity prices. The twist is, however, that the reason interest rates are falling is often perceived as a negative. In other words while lower yields help to expand valuations (i.e. price to earnings multiples) a concurrent recession will do enough damage to earnings to create a downward tilt for the major stock market indices.
The point is that falling interest rates are actually a positive even though for the past decade the equity markets have been trending inversely to the bond market.
The chart at below helps- we hope- to explain. The chart compares the U.S. 30-year T-Bond futures with the S&P 500 Index (SPX) futures from early 2007 to the present time period.
The chart shows that rising bond prices go with falling equity prices. The argument would be that it is not rising bond prices that is the negative but rather the reason that bond prices are on the rise. A collapsing financial system that pushes investors into the safety of Treasuries is hardly the back drop for a vibrant stock market.
Below we return to a chart comparison that we have featured in these pages on many occasions. The chart shows 10-year Japanese (JGB) bond futures and the ratio between Japan's Nikkei 225 Index and the S&P 500 Index.
The basic point here is that Japan's economy tipped over the edge following the asset price bubble that peaked in early 1990. As Japanese growth slowed the trend for Japanese bond prices turned positive and as Japanese bond prices trended upwards the Nikkei began to underperform the SPX. Fair enough.
The trend for Japanese bond price has actually been fairly flat through the past decade as the Nikkei/SPX ratio has pushed back and forth through roughly 10:1. One of our recurring thoughts is that one of these days... after close to 20 years of consolidation... the Japanese economy is going to kick back into gear and when this happens 10-year JGB yields are going to push back above 2.0% (compared to 1.3% at present) which will initiate a multi-year period of relative strength by the Nikkei 225 Index. In the days to come if JGB yields get anywhere close to 2.0% we will start to ramp up our 'pro-Japan' commentary.
Equity/Bond Markets
Before moving on we will finish off our page 1 thoughts.
We have yet to see or read about any markets trend over the past few years that is perceived to be a positive for Japan. If the yen is weak it is because higher returns are available elsewhere. If the yen is strong then exporters' profits will be hurt. If commodity prices are strong and rising then Japanese profits will be squeezed and if commodity prices are weaker then cyclical growth has slowed which is an even greater negative. If interest rates are falling this means that economic growth is negative and if interest rates are rising... then ostensibly this will slow Japan's economy.
Our view is that the one thing that has to happen to signal the start of a sustainable economic recovery for Japan is a rise above 2% by 10-year Japanese yields. If an economy is going to escape from deflation then interest rates have to rise because if they don't... then deflation is still the issue. As an aside this may in fact be somewhat relevant for the U.S. In December 10-year Treasury yields touched down to 2.1% which, we will argue, is very close to the '2.0%' level. If yields move below 2.0% in the days to come then it will likely mean that the U.S. has shifted into a state of deflation and we would argue that as long as yields remain below 2.0% it likely makes sense to look for growth opportunities in the equity markets 'elsewhere'. As long as yields remain above 2.0%, however, we can justify our focus on the U.S. equity markets.
Below we show two chart comparisons of the S&P 500 Index (SPX) and U.S. 30-year T-Bond futures. The chart at top right is from 1999- 2000 and... it has been scaled upside down. This one is going to hurt.
We show the same comparison from the present day below.
The argument is that 2009 is something like the inverse or opposite of 2000. In early 2000 the bond market bottomed and turned higher even as individuals scrambled into an equity market that they had to know was egregiously valued while in 2009 the bond market may have peaked as investors have moved strongly away from an equity market that by most measures offers substantial value.
Every now and then we do an informal survey of a few brokers that we know who have been in the business for close to 30 years. The question that we ask is, 'What is the one trade that, if you brought it to your best clients, they would not agree to do?'. The odd thing is that we are constantly surprised by the answers that we receive. In mid-2007, for example, the overwhelming response was that the one thing that clients would not do is sell bank shares. At year end 2008 the answer was... buy any stock. Not buy GM, Citigroup, Fannie Mae, or even General Electric but... not buy ANY stock. The one thing that retail clients would simply not do was buy any stock in December of 2008. Given our contrary nature... we couldn't help but feel quite bullish.
In any event... we turned the comparison below upside down so that the trend would move in the same direction as the current trend. If the TBonds continue to decline and the comparison holds we could see the SPX push up to the moving average lines over the next month or two and then potentially go through a slump into the second half.
The argument is that falling bond prices should be a positive for equities but the process of building the next bull market may take a few months given the current state of investor pessimism and/or apathy.
Super Bowl and Stock Market...How about Women's Basketball to Stock Market?
Watch for it on the next post.
Thursday, February 5, 2009
Part 2, An Epic Battle in the Stock Market
S&P's Mark Arbeter thinks the skirmish between bulls and bears could end up being a draw for many months to come.
Note: This comment was originally published by Standard & Poor's Equity Research Services on Jan. 30, 2009
There is another battle going on between the U.S. dollar and gold prices, and this could really be fascinating how this plays out. Many times, a weak U.S. currency leads to higher gold prices as well as other commodities. The flip side of course is that when the U.S. dollar is strong, gold and commodity prices tend to be weak. What's interesting here is that the dollar has been in an uptrend since July 2008, and gold has been rising since the latter part of October. Some have said that both the dollar and gold are getting bid up together as they both represent safe havens from all the turmoil going on around the world. Can the two coexist in harmony, and, if so, how long can they advance together?
We really are not sure, so let's look at both markets separately and then try to mold a prediction. First off, gold is in a long-term bull market that started in back in 1999, but really got into gear in 2001 down at about $250/oz. At the recent peak in March 2008, the price of the yellow metal had quadrupled. This explosive move pushed the 14-week RSI to an extreme overbought condition in May 2006 and to a slightly lower high in March 2008. These extreme overbought weekly readings in conjunction with a bearish weekly divergence could be a warning sign that the great bull run in gold maybe nearing an end. In addition, the latest correction in gold sent the 14-week RSI below levels of prior bull market corrections over the last 5 years.
However, there are some bullish arguments to be made before we throw in the towel. The latest correction held right at the top of the rally that ended in 2006, so the pattern of higher lows is intact. Prices have also traced out a complex inverse-head-and-shoulder pattern and broke out of this pattern today. Prices have also retraced more than 61.8% of the recent correction, suggesting a full retracement back to the all-time highs just above the $1000/oz. level. So it appears that gold has a clear shot of running back to its all-time, but that's when things really get interesting. A strong break above $1000 would open the door for a move to the $1200 to $1500 zone, in our view. However, a failure from current prices up to $1000 could set up a massive double top, and potentially set the stage for a huge decline back to the $400 to $600 range.
The dollar, on the other hand, is in a long-term bear market that started in 2001, and has sent the U.S. dollar index to a 2008 bear market low near 70 from a peak of 120. However, we actually have some constructive things to say about the greenback, which we sense is quite the contrarian view. The dollar index has bullishly broken above the bear market trendline that has contained prices since 2002. While it has not yet completed a long-term bullish reversal pattern, it may be working on a massive inverse head-and-shoulder formation. The 17-week exponential average has crossed above the 43-week exponential average for the first time since 2005, a bullish sign in our view.
After moving to an extreme oversold condition, the dollar traced out bullish divergences on the 14-week RSI chart in the first half of 2008. In addition, the 14-week RSI has cycled into an extreme overbought condition late last year, suggesting to us that a new cyclical bull market had begun. Many times, markets do not get extremely overbought on a weekly basis while they are in a bear market. In addition, the monthly MACD traced out a bullish divergence in the summer of 2008 and this indicator is on the cusp of breaking into positive territory for the first time since late 1996. While the near- to intermediate-term technical outlook for the dollar is in question, suggesting that we could see a pullback, the long-term outlook is bullish for the first time in about a decade.
Putting this all together, any near-term corrective action in the dollar could send gold zooming, setting the stage for all-time highs in the metal. However, with the longer-term outlook for the greenback improving, and potentially higher treasury yields in the cards, which raises the cost to carry bullion, we think a long-term top in gold may not be too far away.
Source
It's going to be a wild ride all year long. Fasten your seatbelt!
Note: This comment was originally published by Standard & Poor's Equity Research Services on Jan. 30, 2009
There is another battle going on between the U.S. dollar and gold prices, and this could really be fascinating how this plays out. Many times, a weak U.S. currency leads to higher gold prices as well as other commodities. The flip side of course is that when the U.S. dollar is strong, gold and commodity prices tend to be weak. What's interesting here is that the dollar has been in an uptrend since July 2008, and gold has been rising since the latter part of October. Some have said that both the dollar and gold are getting bid up together as they both represent safe havens from all the turmoil going on around the world. Can the two coexist in harmony, and, if so, how long can they advance together?
We really are not sure, so let's look at both markets separately and then try to mold a prediction. First off, gold is in a long-term bull market that started in back in 1999, but really got into gear in 2001 down at about $250/oz. At the recent peak in March 2008, the price of the yellow metal had quadrupled. This explosive move pushed the 14-week RSI to an extreme overbought condition in May 2006 and to a slightly lower high in March 2008. These extreme overbought weekly readings in conjunction with a bearish weekly divergence could be a warning sign that the great bull run in gold maybe nearing an end. In addition, the latest correction in gold sent the 14-week RSI below levels of prior bull market corrections over the last 5 years.
However, there are some bullish arguments to be made before we throw in the towel. The latest correction held right at the top of the rally that ended in 2006, so the pattern of higher lows is intact. Prices have also traced out a complex inverse-head-and-shoulder pattern and broke out of this pattern today. Prices have also retraced more than 61.8% of the recent correction, suggesting a full retracement back to the all-time highs just above the $1000/oz. level. So it appears that gold has a clear shot of running back to its all-time, but that's when things really get interesting. A strong break above $1000 would open the door for a move to the $1200 to $1500 zone, in our view. However, a failure from current prices up to $1000 could set up a massive double top, and potentially set the stage for a huge decline back to the $400 to $600 range.
The dollar, on the other hand, is in a long-term bear market that started in 2001, and has sent the U.S. dollar index to a 2008 bear market low near 70 from a peak of 120. However, we actually have some constructive things to say about the greenback, which we sense is quite the contrarian view. The dollar index has bullishly broken above the bear market trendline that has contained prices since 2002. While it has not yet completed a long-term bullish reversal pattern, it may be working on a massive inverse head-and-shoulder formation. The 17-week exponential average has crossed above the 43-week exponential average for the first time since 2005, a bullish sign in our view.
After moving to an extreme oversold condition, the dollar traced out bullish divergences on the 14-week RSI chart in the first half of 2008. In addition, the 14-week RSI has cycled into an extreme overbought condition late last year, suggesting to us that a new cyclical bull market had begun. Many times, markets do not get extremely overbought on a weekly basis while they are in a bear market. In addition, the monthly MACD traced out a bullish divergence in the summer of 2008 and this indicator is on the cusp of breaking into positive territory for the first time since late 1996. While the near- to intermediate-term technical outlook for the dollar is in question, suggesting that we could see a pullback, the long-term outlook is bullish for the first time in about a decade.
Putting this all together, any near-term corrective action in the dollar could send gold zooming, setting the stage for all-time highs in the metal. However, with the longer-term outlook for the greenback improving, and potentially higher treasury yields in the cards, which raises the cost to carry bullion, we think a long-term top in gold may not be too far away.
Source
It's going to be a wild ride all year long. Fasten your seatbelt!
Wednesday, February 4, 2009
An Epic Battle in the Stock Market
Note: This comment was originally published by Standard & Poor's Equity Research Services on
As we approach Super Bowl Sunday, we can't help but to compare the matchup between the Steelers and Cardinals to the stock market. We have the immovable Steelers defense against the high-flying air attack of the Cardinals offense. One team will win the Super Bowl. In the stock market, we also have a battle going on, between the bears, who believe we are heading for a depression and much lower asset prices, and bulls, who see the economy recovering in 2009 and are eyeing market valuations not seen in decades. Since late November, the bulls and the bears have been in the trenches trying to move the football [stock prices], but neither seems able to get a first down.
Unfortunately, we think the battle among stock market participants could end up being a draw for many months to come. From the bulls' perspective, we have witnessed enough fear in the sentiment indicators we monitor to make the case that the worst is over. We have also seen a tremendous washout in market internals and subsequent improvement to suggest we have seen a panic or capitulation low. We have also seen both weekly and monthly price momentum gauges cycle into extreme oversold condition, and bullish divergences on the weekly momentum indicators. We are also witnessing monetary and fiscal stimulus on an historic basis, and many times, this stimulus has turned the stock market and then the economy around.
From the bears' perspective, and don't forget they still have the upper hand with respect to the long-term trend of the market, we have yet to even test the November lows, and it seems a long way from completing a bullish reversal. The difference between intermediate- and long-term moving averages remains very wide, suggesting that at best, the market has many more months of price basing before a sustainable uptrend can take place. The bears also have pushing them the relentless train wreck we call the
The rally in the market off the recent lows down near the 800 level for the S&P 500 took a couple days to develop, not a great sign in our view, as it shows hesitation by the bulls. Strong rallies in bear markets tend to be characterized by a very quick reversal in prices, not by wavering price action. However, as the rally got under way, it seemed to gather some much needed momentum, and we thought we could at least see the "500" get back to recent highs near 944. Well, maybe that scenario will still play out, but we think the market better turn higher real soon, or we could be getting closer to finally testing the November lows.
The S&P 500 actually broke through some minor resistance in the 850 to 860 area this week, which we thought was a positive sign, only to fallback below this zone. Since the index has now put in a lower high, we are a bit concerned that we are close to rolling over again. Trendline support, off the lows since November, sits at 823 looking out a week, while chart support, from the recent lows, lies at 805. We believe any break below 805 will open the door, once again, for a crucial test of the November lows down in the 740 to 750 zone.
Watch out for the 2nd part of this artcle from MSNBC. This is a regular thing Stock Market being compared to Super Bowl.Tuesday, February 3, 2009
Market off to bad start in '09
Dow, S&P have worst Januarys on record
By BOB RATHGEBER • brathgeber@news-press.com
The Dow Jones Industrial averages and the S&P 500 index had their worst January performances in history, and February is not starting out any better.
Monday, in the first day of trading in the new month, the Dow fell 64.11 points and the S&P dropped 44 cents.
So, where can investors turn to make some money, even just a little? Good question, and the answers aren't particularly appetizing.
"Save your money, stay in cash," said Richard Schmidt, a professional money manager who lives in Bonita Springs.
David Jones, a Florida Gulf Coast University professor and long-time Wall Street figure, has another take on how to protect your money:
"You can resort to TBills, but they pay almost nothing. CDs, they don't pay anything, either. ... FDIC guaranteed senior unsecured debt of major Wall Street companies."
In January, the Dow dropped 8.8 percent, topping a record set in 1916 (8.6 percent), and the S&P 500 sank 8.6 percent, a full point higher than in 1970.
And historically, the market's performance for the full year follows January's lead more than three out of four years, according to Standard & Poor's Corp.
Since 1940, the S&P has had a full-year loss 20 times, and 16, or 80 percent of those, started with a negative January.
Usually, a couple of strong factors keep the bulls in charge most Januarys:
• Investors who dumped their holdings in year-end tax-loss selling often re-establish positions.
• Pension funds and people who earn year-end bonuses often add to their stock holdings.
But these are not normal times, for sure.
Schmidt doesn't see much hope in making money anytime soon in the stock market.
"Six months, a miracle. Twelve months, a little more hope. Eighteen months, a little better."
Jones, who made his living for more than three decades trading bonds, said at some point stocks will return to favor. But when?
"Right now, we're playing with a different playbook," he said. "Bonds are better now."
According to most economists, when the stock market falls in January, it means people are making conscious decisions not to buy stock, and those kinds of a decisions are not quickly reversed.
A hint of optimism rang in the new year but is now in full retreat.
"The mood is just as gloomy as at any point in this whole bear market," said Stuart Schweitzer, global markets strategist at J.P. Morgan Private Bank. "The economy just keeps on weakening while the financial crisis just keeps on going.
"It's unlikely that the broad market has yet seen its lows. There are more disappointments ahead."
But when those disappointments end and the economy eventually cuts loose, there is a ton of money currently benched waiting for action.
The Investment Company Institute estimates that almost $4 trillion is warehoused in money market accounts and CDs.
Until then, though, Schmidt says to tread carefully.
"The key is to make money carefully and in small amounts."
There will be those, however, who try to read another kind of history - the Super Bowl tea leaves.
The belief says that if a team from the old American Football League wins, the stock market will fall that year. Should the victory go to a team from the old National Football League (the Pittsburgh Steelers, for example), the market will rise.
Investors can only hope that the Steelers victory Sunday means more this year than 70 years of S&P history.
- The News-Press wire services contributed to this report.
Source
The Billion Dollar Question is, When will the market bottom out???
We'll it doesn't really matters if you know how to trade this kind of market or if you are a long term investor timing the market is not on your vocabulary.
By BOB RATHGEBER • brathgeber@news-press.com
The Dow Jones Industrial averages and the S&P 500 index had their worst January performances in history, and February is not starting out any better.
Monday, in the first day of trading in the new month, the Dow fell 64.11 points and the S&P dropped 44 cents.
So, where can investors turn to make some money, even just a little? Good question, and the answers aren't particularly appetizing.
"Save your money, stay in cash," said Richard Schmidt, a professional money manager who lives in Bonita Springs.
David Jones, a Florida Gulf Coast University professor and long-time Wall Street figure, has another take on how to protect your money:
"You can resort to TBills, but they pay almost nothing. CDs, they don't pay anything, either. ... FDIC guaranteed senior unsecured debt of major Wall Street companies."
In January, the Dow dropped 8.8 percent, topping a record set in 1916 (8.6 percent), and the S&P 500 sank 8.6 percent, a full point higher than in 1970.
And historically, the market's performance for the full year follows January's lead more than three out of four years, according to Standard & Poor's Corp.
Since 1940, the S&P has had a full-year loss 20 times, and 16, or 80 percent of those, started with a negative January.
Usually, a couple of strong factors keep the bulls in charge most Januarys:
• Investors who dumped their holdings in year-end tax-loss selling often re-establish positions.
• Pension funds and people who earn year-end bonuses often add to their stock holdings.
But these are not normal times, for sure.
Schmidt doesn't see much hope in making money anytime soon in the stock market.
"Six months, a miracle. Twelve months, a little more hope. Eighteen months, a little better."
Jones, who made his living for more than three decades trading bonds, said at some point stocks will return to favor. But when?
"Right now, we're playing with a different playbook," he said. "Bonds are better now."
According to most economists, when the stock market falls in January, it means people are making conscious decisions not to buy stock, and those kinds of a decisions are not quickly reversed.
A hint of optimism rang in the new year but is now in full retreat.
"The mood is just as gloomy as at any point in this whole bear market," said Stuart Schweitzer, global markets strategist at J.P. Morgan Private Bank. "The economy just keeps on weakening while the financial crisis just keeps on going.
"It's unlikely that the broad market has yet seen its lows. There are more disappointments ahead."
But when those disappointments end and the economy eventually cuts loose, there is a ton of money currently benched waiting for action.
The Investment Company Institute estimates that almost $4 trillion is warehoused in money market accounts and CDs.
Until then, though, Schmidt says to tread carefully.
"The key is to make money carefully and in small amounts."
There will be those, however, who try to read another kind of history - the Super Bowl tea leaves.
The belief says that if a team from the old American Football League wins, the stock market will fall that year. Should the victory go to a team from the old National Football League (the Pittsburgh Steelers, for example), the market will rise.
Investors can only hope that the Steelers victory Sunday means more this year than 70 years of S&P history.
- The News-Press wire services contributed to this report.
Source
The Billion Dollar Question is, When will the market bottom out???
We'll it doesn't really matters if you know how to trade this kind of market or if you are a long term investor timing the market is not on your vocabulary.
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