2010 Resolution

1) Play the market only if you have a proven advantage.

2) Be patient; especially on down days. Remember why you got into the position in the first place.

3) Have expectations and stick to them.

4) Trust, but verify

5) It's never too late to start. Don't be afraid of buying a stock at a 52 week high. The hard work of looking for a proven winner has already been done for you.

6) For value investors, buy a value oriented fund like Third Avenue Management.

7) Take a week off. This isn't gambling.

8) If you want to gamble go to the casino.

HUNT BROTHERS/ XTO/ EXXON MOBIL

LAST YEAR BEFORE NATURAL GAS JUST FLAT-OUT PLUNGED, THE HUNT BROTHERS SOLD OUT THEIR FAMILY BUSINESS TO XTO WHO HAD TO BORROW TO BUY THE COMPANY.

THE HUNT BROTHERS WERE THE SMART MONEY. XTO STILL HASN'T HIT ITS ALL TIME HIGH AS NATURAL GAS IS LOW.

EXXON ISN'T WAITING. IT BOUGHT XTO, NOT AN ALTERNATIVE ENERGY COMPANY, IN EXPECTATIONS OF PROFITS IN THE NATURAL GAS SECTOR.

EXXON IS SMART MONEY. THEY BOUGHT CHEAP IN THE DEPTHS OF A NATURAL GAS GLUT.

Raising rates to slow currency depreciation

The candidate is the Australian dollar. Has it topped? Lets see.

THAKSIN SHINAWATRA: FORMER PRIME MINISTER AND SUCCESFUL BUSINESMAN IN THAILAND

HE INVESTS IN UGANDA.

PER INTERVIEW IN THE ECONOMIST:

Are you doing business outside Thailand?
Yes. I do gold mining in Uganda. I start to get a licence. We’re not [doing] direct investment in production. We do exploration company. We set up company there. We have offshore company here for oil and gas.

UNLESS I'M NOT SEEING SOMETHING, IBI HAS A CHANCE OF GOING FROM $2.88 MILLION TO $30 BILLION (30 million ounce resource).

A MIND-NUMBING 1,000,000% GAIN

They will probably be bought out way before then, but a fraction of that percentage gain won't be that bad.

MAGY--Follow up, it doubled in price from 1 cent to 2

Insiders to the social network for tweens backed the truck up in buying. The stock doubled and has heavy volume trading currently. A complete lottery ticket, but what tilts it into the speculators court is the insider buying. But for speculators in the stock market you need patience something that that is not favored in Las Vegas.

Speculate with broad strokes.

What do you think of this quote concerning trading

Remember, trading isn't about understanding what's true, but understanding what most other traders are thinking.

A friend said this, but I strongly disagree with this quote. It is that mentality that won't get you ahead in trading. Of course, you can have a feeling what the herd will do. But you got to have a little bit of back bone and make a decision based on supply and demand. This is the only way of thinking that will separate this form of activity to gambling, in the form of say poker. If you want to play poker, play. But if you want to participate in the financial markets, think big! It may be a gamble, but it will surely be rewarding.

Is this gold and silver rally for real?

The sceptism is holding back the breakout in gold in the marketplace, yet allowing a stealth market, until it dawns on the public about the implications of precious metals breaking out. Granted, if this is for real, everything with gold or mining in its name will be going up in magnitudes, but I believe there will be some solid investments as well. Two I bought with hesitation, since the last time I bought one, GROW, I had to sit and wait as it went from 12 to 4 then righ back up. Frank Holmes, the CEO, has been buying it up in small increments.

1) GLRE--GREENLIGHT CAPITAL REINSURANCE: My friend mentioned it because it is David Einhorn's version of Berkshire Hathaway. The catch is that the reinsurance company gives its money to Einhorn's company to manage so there is 2% gone for management (not done with Berkshire) and 20% gone concerning profits. But the 7 PE and the equity trading at 1.5 book value makes me overlook the costs because Im see the profitable opportunities that lie ahead. Additionally, Value Line is quite bullish as well.

2) GROW--Now it is, according to Yahoo finance, about 6times book value. But when gold was lower than this and gold stocks were in vogue, GROW pushed into the 30s area. So why can't it now? Frank Holmes plain spoken manner concerning why one should own gold should make him a household name and a household mutual fund as well. Their assets under management could be lit up and match PIMCO when the gold market finally peaks. Also with the potential of blowout appreciation in the items that GROW invests in, their assets under management could balloon and have the company earn record profits.

For your consideration...

If the S&P500 could sing

Look at what's happened to me, I can't believe it myself.
Suddenly I'm up on top of the world, It should've been somebody else.
Believe it or not, I'm walking on air.
I never thought I could feel so free-.
Flying away on a wing and a prayer.
Who could it be?
Believe it or not it's just me.
It's like a light of a new day-,
It came from out of the blue.
Breaking me out of the spell I was in,
Making all of my wishes come true-. B
elieve it or not, I'm walking on air.
I never thought I could feel so free-.
Flying away on a wing and a prayer. Who could it be?
Believe it or not it's just me.

By Mike Post from Greatest American Hero

Hedge: Long LAYN Short CAT

LAYN is in the mining business, like CAT is, by selling machinery. It has a better balance sheet than CAT does (less leverage) and provides more, I believe, machinery to the gold mining industry. So I believe it's a great hedge; especially with the thought that it may be bought out by a behemoth like CAT. It is also a play on the rising price of precious metals.

10% SHORT

I think Caterpillar (CAT) can sell off 10%. The risk is its 52wk high. The market is bullish but some more than others, hence the word hedge. This is a great stock to short I believe.

Buy penny stock gold mining companies

I think Jim Sinclair is correct and that people will be hunting for big speculative plays. If gold is here to stay, then the year 2000 for high techs will be chump change as gold mining companies will be considered, in an early stage, as financial institutions were once. 1-10,000% should be the peak on them.

If that is an exagerration then please review the year 2000 bubble where high tech companies with virtually nothing jumped from$1 to $300 per share.

Lets see.

Of course, the dollar and financial confidence may crash and that is something I do not want. But a bull market in inflation plays appears to be the long term trend currently.

CDE should be a $200 stock.

SP500 on sale again

Buy the S&P500 on yesterday's panic day. There should be some type of rally. But if not, then get out with a 2-3% stop. Can it really drop again, that quickly?

10069 high to 9737 current price on the Dow is a 332 point sell off and remember that the last down day for the general market was an up day for the Dow, due to IBM's strong earnings performace.

Short Gambling?

LVS, MGM, and WYNN have had impressive runs. This is a long shot but one of them may go broke, so why not way out of the money puts?

$5-10 bets may be a 10 bagger (1000% gains).

What to do

The market is up so should one worry about a correction? Yes. But one can reduce the worry by buying stocks that are undervalued. As Mr. Dines, the newsletter writer, often comments: "Drink upstream from the herd"

As to today, let the market settle. There should a clear trend late today or tomorrow.

Of course, by then I will be going down the aisle and definitely not have the financial market in mind the rest of the week.

What to do today

Nothing.

1) Earnings season with a lot of headline dissapointments
2) Options expiration

Enjoy the weekend!

What to do after making 100% profit

My friend emailed me that he patiently waited and made 100% on his Hecla position and now asked me what to do after taking half off the table. He explicitly mentioned that he wants to put it into other cheapo companies.

Since he has a precious metal mining company we need to diversify into other cheap stocks in other sectors.

Here are some suggestions:

Battery: CBAK or XIDE
Teleco: VG
Defense: TATTF
Private equity: ACAS
Transport: YRCW
Medical: CRY or CXM
Energy: DEJ
Retail: MFGD

Uranium Miners popped yesterday

LOOK AT :

CAMECO /DENISON /EQUINOX /CONTINENTAL PRECIOUS /LARAMIDE AND UEX

LOOK AT :

MEGA BELOW A $1 BUT UNDERSTAND THEY ISSUED MORE SHARES WHEN THEY FELT IT OPPORTUNE. MORE CASH EQUALS MORE PROFITS AND LESS PROFIT SHARING WITH FOREIGN COMPANIES

Vonage

vonage went from $0.50 to $2.00 very quickly and will most likely keep popping since they have a viable technology.

This is a penny stock that has a clear trend in site.

UP!

Money4Gold Holdings, Inc - - This is an IBD100 waiting to happen

Currently MFGD is a 23 cent stock that can easily surpass a dollar. Please go to their website for what they are all about http://www.mygoldenvelope.com/

Essentially, they buy scrap gold trhough advertising on television and the web. So what are the catalysts for a big upward move?

1) People formally value it at >$1
2) Insiders are buying
3) They are expanding and advertise in multiple languages
4) Easy to understand business
5) Big volume spike
6) This will be the ultimate stock as gold goes bonanza

Downside:
1) The insiders milk the company and the stock is basically a ponzi scam.
2) Advertising, which is done by an insider, expenses get out of hand
3) People sell their gold locally, not via web, but understand that QVC and Home Shopping Network made no sense at first either.
4) Can one justify a 30 million market cap going to $300 million?

LETS SEE!

As to Gold...

I would like to think that if gold is going to go higher it would be now.
Buy whatever you want and it should be higher in a very short while.

I really like CDE, HL, AUY. Miners.
And LAYN. Equipment provider. Appears to have a good balance sheet.

Penny Stock Analysis-NCEN/PSTI as examples

I didn't feel good with my short response yesterday since my readership is picking up again so want to mention a few things to my readers out there. First, please write and ask me anything that is on your mind. It helps me know what people want to read and if I'm presenting the information in a clear and meaningful way.

NCEN ,as mentioned, is a penny stock trading at 1.05 presently. It is not a trading stock and may linger for awhile, but it was a 5 stock at one time in a sector that is growing and has the huge financial support of Boone Pickens as well as the US government (that alone makes the sector investable). The clear technical is that volume increases on up days and higher lows - it is not too complicated just patience is required.

To add additional support to that simple method, please look at Pluristem (PSTI) it ran and lingered but then CRASHED, but why? The stock was bullish but then the issuance of new shares drove it down. So in my mind the technical bullish case led to $3 million more in the bank and additional time for PSTI to show its stem cell research as viable.

As an investor, you are looking for clues that may help in tilting the odds in one's favor. I believe that and experience brought me to writing and getting feedback on NCEN. On a down note, BYOC showed that a bounce couldn't happen due to the heavy sell volume. So it is a simple, viable strategy with numerous caveats concerning penny stocks.

NCEN-what's the technical basis?

Someone, Mr. Anonymous, asked what's the technical basis for this penny stock. I would say that penny stocks have been moving up and the price action is making higher lows and volume is trading above the 20 day average.

In sum, lets see!

Nacel Energy Corporation

This utility has a 24 million market cap and is involved in wind power. On a technical basis, wildly bullish and can shoot up from here.

Ultimately can drop 50% to cash in the bank. But the upside is that they got permitted and now may be able to make some revenue and hopefully for the shareholder profits and perpetual dividends!

http://www.nacelenergy.com/

The Playmaker - Brett Favre

In trading, like in football, you have to anticipate. Brett Favre is one of the best there ever was in regards to that.

I have followed his career since he beat the New England Patriots, but only rooted for him since his second Super Bowl appearance and still waiting for him to win one again. Though his team accomplishments were early on in his career, his individual accomplishments have accumulated over time and his regard amongst players and fans just keeps getting better (except possibly in Green Bay).

As of today, he is coming out of his second retirement and still showing the NFL and viewers about what happens when you enjoy what you do.

I am basing this blog on the I.H.T article, by the Associated Press, 29/9/09. The article quoted is in bold.

After a second half that was mostly uneventful for Favre and the Vikings and the game in its final seconds, Favre recollects what he said to his team: "I didn't say a whole lot" Favre said. "I knew what I was thinking: We blew our chances." The key here is, he didn't give up and stuck to his game making ability.

The article describes the end of the game: "Brett Favre was flat on his stomach after taking another hit [sometimes you gotta take those lumps even when succesful], trying to watch his 46th pass [look how many passes before the winning one] of the afternoon as it zipped toward the back of the end zone where a little-used reserve wide receiver [you never know where your luck will come from] was breaking for the ball"

Continuing, Favre says, "I didn't know who caught it. I just saw one of our guys streaking across." He wasn't concerned with the outcome, but in the process as Warren Buffett is famous for saying. We can see that by Favre's further comments: "I just threw it as hard as I could. I don't think it was anything special. The catch was pretty outstanding [translated in trader parlance-he let his profits run]"

The article describes the impact on Favre's body and shows what it takes to succeed:

"Favre took plenty of blows from the 49ers and listed aches to his right foot, left knee, both shoulders and neck when asked for a report on his health.

Besides the individual nature of Favre's accomplishments, itsn't it interesting how one person's enthusiasm can change the face of a team or organization?

'It happens against you so many times playing against him, so it was great to see him on our side,' defensive tackle Kevin Williams said.

So in summary, you gotta enjoy what you do and good things will happen for you and, if not, surround yourself with someone that does!

Market down hard, but is this it?

The market was ugly with exagerrated moves. What is interesting is that for the past two days 57% of down volume in the NYSE was solely Citigroup. And Bank of America comes in at about 20%. Additionally, Moodys keeps selling off. But all three are all headline, politically driven corporations.

The strength is that medical related companies strengthened yesterday. Look at Abbott which has been a dog throughout the market rally as well as Bristol Myer and the highly volatile Amgen.

Also, AONE, a battery manufacturer had a tremendous 50% pop on its first day of trading and now hosts a market cap similar to a more established company, XIDE.

Natural gas is up! XTEX ROSE EP are great stocks on dips.

So, I think

Instead of a Smoot Hawley type of legislation, concerning the restriction of free trade amongst countries, and a leading cause to exacerbating the Great Depression, we will have it with investing. The proposal of taxing transactions is heinous to financing industrial progress and valuing assets, which includes currencies.

These things take time, but the vilification of trading and finance will probably cause this to be yet not be the root of the problem.

When a guy takes a bonus, stock options, or 100x the pay of the average worker in a company but has no real earnings, he should be compelled to give the money back because in some circles that is called knavery and in others a political contributor.

So the circle goes.

I think this article is worth reading and from 2006!

http://money.cnn.com/magazines/fortune/fortune_archive/2003/11/10/352872/index.htm

People are against trade tariffs concerned about trade wars. But are in one. Look at all the jobs lost over the past 15 years. Free trade guys yell about what occurred during the Great Depression with the Smoot Hawley tariffs, but our country has to learn how to save. Whether foreigners understand or not is their problem, we must focus on #1.

Orix Corp

IX, had a nice move then sold off. Give it a 8% stop. This one may move 10-20% but past performance doesn't guarantee future performance. They do business in the same category as CIT and GE Finance. Lets see.

Bank Stocks?

Here are some stocks that look cheap in the financial realm:

1) New York Community Bank- It has been a laggard even when the markets were booming.

2) eTrade- They make money in their brokerage and their mortgage related business may stabilize as judged by the bond market. I remember shorting it at 14-15 so can it retrace to $7?

3) Lazard- Investment bank that actually doesn't trade on its own account. Don't understand why the Price to Book is so high unless there is something I'm not seeing.

4) Farmer Mac- Government sponsored bank concerning the farming community.

If Interest rates stay low, then P/E ratios on corporations

can be obscenely high which ergo equates to a very high stock market indeed.

A 10 year US note at 3.48% comes out to 28.7 PE for the SP500.
Additionally, that doesn't include growth, and growth will happen with stocks. So lets assume 1% growth then 3.48%-1%=2.48% which comes out to a PE of 40.3

So if deflation is in the cards the stock market will sky rocket, even from here, especially for large cap financially sound corporations. I think small caps are popping due to their unhealthy state and their need to sell to a larger company.

If inflation happens, retail gets killed but manufacturing and farming related to where inflation occurs will soar then from there the economy will balance itself out. And of course all debts will be repaid but business will not be back to normal.

Make sense?

Obama's cancellation of the defense shield

in Eastern Europe may signal to bottom in the dollar and possibly the manipulation in the price of natural gas.

Also, remember that the first oil deal in Iraq was with a Chinese firm.

With barrage of negative news concerning the dollar, it did not hit a 52wk low while the market surpassed one resistance level after another.

The natural gas companies have been showing some tremendous percentage gains as the commodity lagged, but don't believe that will hold any longer.

Bullish: US Dollar, Natural Gas

My Friend

is very confused, but confident in his outlook that the economy is brutal and the stock market will reflect that after our 6-7 month euphoria is over.

Reasons:
1) Consumer credit is contracting
2) Banks aren't loaning
3) Most leveraged companies have no flexibility for growth
4) The dollar weakness is driving global markets
5) M1 and M2 growth implies deflation
6) Bond markets don't lie and they are up

What I would argue is that:
1) Negative news tends to be bullish due to the fact that all the dirty laundry is out in the open
2) Technically speaking, there is an accumulation occuring in the market and I don't believe that this is coming from weak hands, but very strong and confident individuals, like Jim Rogers.
3) The market already crashed!

Today's Lesson is:

DON'T FIGHT THE TREND.

OF COURSE, YOU HAVE TO KNOW WHAT THE TREND IS!

Another social networking site

So far my Netex stock is suffering a post 144% pop depression. On that note, I found out about the social networking site www.kiwibox.com, owned by MAGY. It is trading for a penny. They have a deal with Universal as well as YouTube. Of course, non of these companies make any money but they seem to make their owners very wealthy. Why not with this one?

Market is ugly

and the dollar is up. This is a day to step back and see where things lay.

Shire Set for $50 Million Windfall on Demand for Gaucher Drug

That is a headline from Bloomberg
http://www.bloomberg.com/apps/news?pid=20601109&sid=auDOvthHzLnA.

They unfortunately forgot about Protalix (PLX)
Shire is a $52.45 a share stock and a market cap of $9 billion.
Protalix is a $8 a share stock and a market cap of $500 million.

To get to Genzyme's $16 billion market cap would be a 100% gain for Shire.
To get to Shire's market cap would be a 1000% gain for Protalix and to get to Genzyme's level from there would result in a 3,000% gain. (all figures are approximate)

So which stock would you want to gamble with?

U 4 Union

Union operations that should weather it out due to fixed labor costs as opposed to the non-union shops where risk by a Democratically controlled government is imminent.

1) YRCW-YRC WORLDWIDE (Highly speculative)
2) KR-KROGERS (Wal Mart isn't going to the 60s anytime soon)
3) X-US STEEL (Global powerhouse)
4) F-FORD (Foreign outfits better get ready for more expensive labor)

Still looking for more union outfits that have lagged the market in order to capitalize when union dominance reemerges.

You have to pay for labor.

The Real Deal

Real Networks is a stock that has had a spike recently due to the encouraging news concerning its deal with Apple. But many would be off put to add to this one due to its spike higher. The reality is the book value which is primarily in cash.

This Nasdaq stock is cheap, has lower risk than most, and products as well as management that has stood the course against the monopolistic big boys. This one, given favorable markets, should be $10.

Natural Gas vs. Natural Gas stocks - which is correct?

The natural gas stocks stayed strong as, what I believe, natural gas is making a secular low. But of course low can go lower, so are the equity investors right and the natural gas speculators wrong? The key determinent is commercial users and they are up to their nose in natural gas so it is a fair bet that the equity investors are right in this matter. Of course, the only way to really see is if the market retraces and the natural gas stocks do not or stay strong, relatively, to the oil producers.

Some cheap natural gas companies that I like are currently: ROSE, EP, DPTR, DEJ, POU.TO and the reasons for them are:

Paramount Resources has some interesting deals up north in Canada on Indian land which I believe is yet to be exploited. And I also believe they will be able to claim the land that Northern Sun had before bankruptcy.

Rosetta scooped up all the great resources from Calpine when they went broke in California.

Delta petroleum is Kirk Kerkorian's natural gas play and heavily leveraged. But if you look at the performance of his MGM, maybe lightning will strike twice. And if you noticed, his bet on Ford turned out to be prescient.

El Paso is a large company that will profit immensely on any economic turnaround.

Dejour claims their property is worth multiples of its market cap due to recent purchases surrounding its land.

The Break (USD)

Usually, when it is obvious it's obviously wrong, hence the use of stochastics to measure oversold and overbought conditions. But then there are breaks where there is a point of no return.

Is the Dollar at that point? In the 70s, it was Nixon disconnecting us from the gold standard. History rhymes, doesnt repeat. The US could inflate the debt away, but does that mean the dollar will crash. "Nobody is innocent in this s***" Russell Crowe likes to say to Di Caprios' character in Body of Lies.

The only man in the world that is betting a country's finances that the dollar isn't going to zero (about 30 billion and counting) is Stanley Fischer at the Bank of Israel. George Soros bet and won a billion in a day breaking the Bank of England, what will Israel make if it proves to be true about a country?

UUP is 2x leverage on the US Dollar basket. It is a garbage ETF to own but the key here is options. Buying a little out of the money options may put you out a hundred bucks but may return 1-300% Lets see!

NETEX vs. Beyond Commerce

Netex developed an intriguing search interface and has been around since 1998 www.netex.co.il. They finally received approval on their patent. Advertising is key and very intuitive with them .ie very easy to understand the business (maybe to easily). They are marketing themselves to investors as a publicly held company helmed by a youngster with profit potential to rival Google and Facebook (debatable).

Beyond Commerce developed a direct sales approach to marketing on the web in a very hard to understand manner. It is helmed by an oldster who struck it big in the late 90s with sites like shopping.com. But like we are seeing now with the founders of Skype's new site joost.com, lightning may only strike once for some entrepeneurs (meaning they got lucky), as well as their current litigous relationship wth eBay.

Time will tell. But the market cap of Netex is about $25 million and Beyond Commerce's is about $10 million. They are neck and neck for your investment dollars and web success. Let see who wins!

LARAMIDE RESOURCES

LARAMIDE HAS

1) a long term economically viable deposit in Australia
2) a long term economically viable deposit in Mongolia
3) has a tremendous play in Virginia, USA which houses supposedly the richest uranium deposit in the US
4) has all of Homestake's (now Barrick's Gold) uranium claims in the U.S.
5) owns a technology via Uranium Equities in exploiting the uranium in phosphate
5) Money and financing
6) Management that actually likes what they do

WHAT THE INVESTOR NEEDS
1) Patience
2) Continuation of nuclear power
3) No hickups to planned nuclear power plants

Labor Day + Gold breaking $1,000 + Employment numbers =

DONT TRADE

Uranium mining and my contempt of BYOC

There is a shortage currently, and an increasingly one, in yellow cake, but with natural gas below $3 what is the point in going nuclear?

That is trend following.

On a fundamental basis, many of these miners are trading below book because the cost of management, geologic studies, mining permits, cash in the bank, access to new money are significantly higher than the current value the market is placing on these companies; not to mention the economic value.

Mining is a perfect competition type of business and as such, tough. The market has valued the equity shares likewise. BYOC is currently valued the same way, but at the end of the day, you don't need to rely on management or 1000s of small businesses pitching in for revenue gains. Rather, you got pounds in the ground. And in the olden days, that was real wealth. Not illusory.

And as Jim Sinclair puts it and totally taking his comment out of context "there is a need of resources, not year to year price fluctuations."

Sold BYOC

Ultimately I sold for three reasons:

1) The fear of losing out on the biggest bonanza since Google was greater than rationality

2) I relied on a friend's enthusiasm

3) Don't understand the business

BYOC III (and this is not very favorable)

Finally, after searching for negative articles concerning Beyond Commerce and Local Adlink, I found one that sums up the pessimistic attitude concerning this particular company's future. The summation of his remarks are "don't believe in shorting stock - except for this economic crash."

http://www.mlmwatchdog.com/internet_pyramid_ponzi_crooks.html

Also, I found a personal blog that basically says localadlink is a fad and charges too much for its product.
http://www.homebusinessblogs.com/archives/683/local-ad-link-scam-or-legitimate-advertising-opportunity/

Bob McNulty basically responds that it took Amazon 7 years to turn a profit and that, ultimately, is the model he is using to sell ads.

My positives are:
1) The web is new to targeting individuals by their localities
2) Established management
3) They generate sales
4) The stock cratered. Good things happen to cheap stocks
5) Boomj may become more popular than one would think

My negatives are:
1) Who really likes direct selling? (but someones got to do it)
2) Their financials are atrocious
3) I don't see their name on anyone's mouth so no discrepencies
4) There is a saying: "If there is a doubt, stay out"
5) I was hopeful and that is a low state, as James Dines always mentions, for financial matters

BeyondCommerce II (Customers - paying - more than market cap)

A local business search directory and advertising network representing more than 14 million companies, LocalAdLink allows businesses to reach customers in their local communities by using geotargeting technology to display the businesses' ads. As the effectiveness of print advertising continues to wane, the cost of printing direct mailers increases, and as the reliance on Yellow Pages increasingly declines, more small businesses are looking for ways to cost-effectively reach local customers online

Beyond Commerce

I don't understand how someone sold their $300,000 stake in Beyond Commerce and the stock cratered to 16 cents a share.

Either I'm on the losing end of the stick or not. But the fact remains that as Beyond Commerce claims:

Beyond Commerce Reports on Growth as the First Internet Based Direct Sales Company Through LocalAdLink and i-SUPPLY

While the monopolistic Twitter, Facebook, and Google all have Communist business models - everything is free- I believe that people will have to realize that their time is precious and that they should be paid for their time and effort. Hence, a business model based on profits never goes out of style. Microsoft built an empire on profits, not on wasting money into monopolistic sites like Facebook that may or may not pan out.

Everyone is basing their pricing models on piggy backing onto the cable lines; while BeyondCommerce should stay the course on any platform, even if charged for maintaining its website.

ADDITIONALLY, look at Aflac. Aflac built an insurance empire on sales. Sales never goes out of style. Additionally, we also have the successful Avon, Tupperware, as well as HerbaLife, to add to the list of direct sales that were unimaginable successes. The only difference I can see is if the directors are long term in nature or looking to stick around only until a bidder comes in to buy at a wildly marked up price which isn't necessarily bad either. Ultimately, the key with this company is its management and integrity.

At a market cap of 8 million and revenue that keeps growing, the reward is ridiculously higher than the risk.

Calling yourself an investor/trader 2009

There are two distinct traits I have found that you need to have to be consistently profitable in the wild markets we have and are facing.

1) Buying on down days with the idea that you are buying discounts with an expectation that the issues purchased are worth higher in the future.

2) Looking at missed opportunities and learning from the outcome but also acting on the next one. Not out of fear, but out of opportunity in the method that has been found to work according to one's psychology.

Natural gas is troubling

Ultimately, if the demand for gas is low and the supply high the price should and will go down. But if the demand is low then that would reflect real demand from the economy and the fact that the market has rallied in expectation of greater demand in the future should pass on to a commodity, where production has been cut as has development. So, from a long term perspective, bullish, as judged by the euphoria in global markets. The problem is who wants to wait that long and where is the price stability in this commodity.

I would argue that there is a painfully long oil and short natural gas hedge. For every spike in oil there leads to a downward one in natural gas. That is why speculator's positions are at all time highs in the short column while the commercials who realize how cheap it is have been backing the truck up and waiting. Go with the real money, but it just takes time.

Natural Gas Items

People scorned George Bush and his foreign policy, but what I see is the same.

1) Hillary Clinton getting tough (whatever that means) with Iran
2) Joe Biden supporting Georgia against Russia
3) The US supporting Ukraine in its bid for NATO membership
4) COT commercial interest is very high

Russia, to my knowledge, is a huge supplier of natural gas and the only commodity that has dogged the appreciation of everything else; even the dollar.

Russian markets have been champs in this market rally, so why can't natural gas rally from here, and significantly? Where's the premium!!!!!!!

Reasons to be short Wal Mart and Nucor

From Bloomberg:

Union Campaign

The Service Employees International Union and other labor groups are using the encyclical to try to win support from Catholic senators such as Republican Lisa Murkowski of Alaska and Democrat Mary Landrieu of Louisiana for a bill that would make it easier for unions to represent workers, said Mary Kay Henry, executive vice president of the 2 million-member SEIU.

The Pope “offers a much-needed reminder that to create an economy that works for everyone it is critical to protect workers’ fundamental right to join together,” said John Sweeney, president of the 11 million-member AFL-CIO, the largest U.S. federation.

Republican Minority Leader John Boehner of Ohio, a Catholic, said any effort by Democrats to use the Pope’s remarks to push their agenda would fail.

Most people “would rather go to work than be on welfare,” said Boehner, 59. “We think our economic agenda will do more for Americans.”

Why striking out on your own is better than paying for advice

How not to panic or Making AutoTrader work for you: Part I

AutoTrading is a very easy concept. It is simply a black box that is a trading strategy long and short that executes trades in a systematic manner 24/7. Markets, economic statistics, and world news events can rattle an investor's calm; especially one that wants to make slow and consistent profits in a very uncertain marketplace. That is why the service is provided. When there is a demand someone comes out with something to meet that demand. Here is a way where you can have access to experience forex traders and basically stand on their shoulders. The trick here is to pick the right horse and in that regard there are certain statistics that are more relevant than others. I hope to show and explain them in a way that it is enjoyable to you.

Is it profitable? This is the performance of the same demo you are using for this month.

Here is the portfolio I used and will explain in the next blog.

Update on Euro using ebook strategy: Sell!

Please look at the chart to see the setup used to setup the short. It's still active. Lets see how many pips we can make from it! We are currently in at 1.3970 (stop is 1.4070).

Summer Vacation

I learned that when things go well one should take a vacation and freshen up. Additionally, from my knowledge, traders as well as invstors take the summer off. I am going to try it this year (fingers crossed). So will be starting up again in August before or after Labor Day.

Thank you for your interest and enjoy the summer and as my friend says, "make it a powerful day."

Buy on Dips though

it looks like one of those doozy of a sell offs is occurring. Wait it out or hedge, but don't get off the boat because you just never know...

Nice Systems is an Obama play

Nice Systems makes money. Its book value is about $16 a share while the company is trading for about $23. The P/E is 33 so you are getting about 3% on your money and providing a service that the US government is highlighting and mentioned in Nice's profile in Yahoo.

Nice provides "fraud prevention solutions, which pinpoint suspicious patterns and abnormal behavior within mountains of data to assist in the identification of financial crimes; and AML solutions that help institutions detect suspicious money transfer activities and money laundering related issues with new accounts"

So

the market is down this morning and it makes sense for profit taking but is this the sell off everyone is expecting?


I had apple juice (not beer anymore) with my friend at the local bar and talked about how does one cope with profits when we were just recently sweating over the losses in the market. We acknowledged how things appear calm but no economic event has really turned around.


Consider employment numbers. The rate of unemployment slowed down but if it continued at the previous rate we would have 20-30% unemployment quite quickly but as every driver knows, you slowdown on the curves and brace for the final lap.


But how can the market sell off significantly when it's springtime. Then again that was the same rationale I bought Bear Stearns with.

So at the end of the day I am a bit confused.

Where is the flaw in this comment?

Federal Reserve Chairman Ben S. Bernanke told lawmakers May 5 that the central bank expects U.S. economic activity “to bottom out, then to turn up later this year.” Another shock to the financial system would undercut that forecast, he added.

So he is saying that the economy will recover unless it doesn't.

As to uranium mining companies and all things nuclear

How high can the market go?

The market as we have seen can go higher and lower than expected, so the point is not to guess, but to buy on dips and hedge (ie short the market) with sectors of the economy that are inherently bearish.

Except natural gas which seems to have bottomed here. 52wk low stop and let this puppy run!

Someone

commented on my Apple short and how people are moving away from PCs and moving towards hand helds, something Apple specializes in. I am short it concerning valuation, not whether it is a viable business. Currently, hand helds such as iPods are not commodities but once they are I don't believe Apple's growth will be there.

On a technical analysis basis, there is a double bottom as well as a 50% retracement which bodes well for the stock price.

Back the truck up natural gas

but I base it on my gut...just everything else has rallied except it...lets see an uptick dude!

If there are "green shoots" then

why in the hell can't natural gas find an uptick. Commercials are wildly long but there doesn't seem to be any sustainable price with this commodity. Not sure what is going on.

If we were bullish

then Apple should have followed through on Friday. The Nasdaq up over 2%, but Apple down after "surprising" earnings should leave room for pause. I have not written much this week since the momentum of the upswing leaves me a bit confused currently as to what to write about, or, possibly, too busy to give it enough attention.

Hope the weekend goes well for everyone.

Please read Jim Sinclair's updates

He has been very informative of late. Additionally, TRE, the stock he is the chairman of, had a significant sell off which could have a major rally back.

I shorted the Nasdaq since

Apple's earnings are tomorrow. I am short Apple because of valuation not anything to do with its product line.

Buy dips

Though it feels like the top is in that isn't a certainty.

Options expiration today

Today may be a little nuts due to expiration and exagerrated moves in the market. But what was white and black yesterday may be opposite this coming week. Buy sales, and sell marked up items.

Have a good weekend and enjoy the spring air!

It is a funny feeling

to start a company and charge for a service that I enjoy doing. It fills me with self doubt about the future and places on me modestly. But the fact of the matter is that I believe I am charging for my time, not for the advice. That is how I rationalize it. Can't wait to start but as that song that I can't get out of my head goes..."you know it's going to be a long, long time"

Face the music

Short real estate has been a conundrum for me, but prices don't lie and people want to bid up these dogs. So lets look at it this way:

1) DRE has a share issuance and the stock went up
2) GGP files bankruptcy and isn't at a low today
3) Bad economic news today concerning real estate, yet the market ripped

The negative is that commercial real estate is leading the non tech higher and could be the last sector to pump up percentage gains till a sell off occurs

1) Gold got hammered today...the playbook has been to buy on these days
2) Newmont sold off and broke $40. I doubt it will last long. Last dip before rip?

That's all I can think of at the moment.

Biggest commercial real estate bankruptcy

General Growth Properties filed a 29 billion dollar bankruptcy. Does that make it a bottom or the beginning of a trend? I noticed Mr. Zell was on Bloomberg and that IYR is shooting up so either it's the beginning of the end of a short squeeze or the bottom is in. Now look at these two charts. Chart #1 shows that GGP had two whopping rallies in excess of 200% before todays bankruptcy filing so it is completely valid to buy dogs, but to take profits when they come. Chart #2 shows the strong rally that IYR is currently in and if it continues one would have to expect that utilities will have a nice rally that has not occurred as of yet. If not, then IYR should go lower and follow GGP down the ring of fire. Let's see!

Mr. Taleb's comment puts into question "confidence"

7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”. Cascading rumours are a product of complex systems. Governments cannot stop the rumours. Simply, we need to be in a position to shrug off rumours, be robust in the face of them.

Benjamin Linus -- imagine him as an investment banker

THIS IS THE REASON YOU CAN'T LIVE WITH THEM BUT THEN AGAIN YOU CAN'T GET RID OF THEM EITHER. WHY? BECAUSE THEY ARE FOLLOWING THE RULES; ALBEIT THE ONES THAT AREN'T READILY ASCERTAINABLE.

Hedge...Buy Las Vegas Sands, Short Goldman Sachs

Las Vegas Sands has better and able management and an easier to understand business than investment banking. Additionally, gambling, at the moment, is a more ethical business than investment banking and have not been bailed out by anyone so, hence, no government interference.

And ultimately, LVS was at one time $140 a share and now $4. GS is over $100, but can be $4.
Lets see!

Short Goldman Sachs

I lost a lot of money the last time Goldman Sachs demonstrated through news outlets how financially healthy they were, but weren't.

This talk of them buying the government's interest is a publicity stunt. Additionally, the correlation between paying off the government and a higher stock price is not valid.

My gut says 20-30% upside risk, but it will fall just as fast.

Yesterday's Market Action

on a day that sees light volume due to the holidays and 2 key economic events coming out today seem suspect.

Today's market action should dictate the short term action in the market.

Commercial real estate broke out Friday and the financials yesterday so it should suggest a new trend is progressing. Additionally, looming General Motors bankruptcy only received a yawn in the marketplace, which tends to lend credence to the bullish scenario.

So buy on dips? and hold on!

Holiday Time

I haven't written since it's holiday time. So it may be a bit choppy over the next couple of days. But I hope to write longer and entertaining articles just that not only is it demanding, it is just hard to do; as opposed to making seat of your pants comments.

The market has, and I haven't read the paper for a year, been following the pattern that Investors Business Daily would say is bullish. The general market even has the W bottom which would be wildly bullish if, when, the market surpasses the January-February high. It is ironic that we would be going up with a pattern that harkens to the other "W", as in our former president.

I have been getting burned as it relates to commercial real estate, but the fact remains that it does appear as a great hedge to other sectors and beaten down companies in the real estate sector, like mortgage related ones (CIM) and property management (CBG).

As to Apple, people flock to what is easy to understand....so short term pain, long term gain.

Of course Apple is up on the day :(

Give me a break

GM is up today.
The last time I posted that I believe the market corrected as GM followed the market down, but I am arguing that the market will follow it higher.
Buy on dips.

Usually rocket testings and earthquakes

cause gold to go down. Buy on the dips. As for the market, I mean it has been up for quite awhile, but it should rally today.

After I wrote about the iPod, the IHT had an

article by Virginia Heffernan entitled "I hate my iPod"

http://www.nytimes.com/2009/04/05/magazine/05wwln-medium-t.html?_r=1&scp=2&sq=heffernan&st=cse

Update on Apple from "Megan"

"Megan", my business correspondent, who I couldn't help but overhear in a bus stuck in traffic for an hour filled with people worn out after a hard day's work, talking about life, parties, friends, and Apple's future. She mentioned that she just loves the products they are making, but you have to put up with their bureaucracy (that comment I usually make about girls).

I'm not sure if that signals a top, but when people mix the product with their management and by implication their financials, I wouldn't say that's healthy. Visible success, I believe, in this day and age breeds contempt.

The day before I was hearing 10 year olds talk about the merits of Ben and Jerry's vs. Haagen Daaz. Which once again reinforces the merits of a good product, salesmanship no matter how small the customer is, and a succesful image of oneself.

As opposed to Apple where people that buy the phone tend to buy the stock as well. Don't mix the two together.

Penn and Teller on Nuclear Power

Commercial Real Estate is back in vogue

so now it can be shorted again since the classic bearish news made it bullish. Have no idea as with the market when or if it will break, but value is not what you get when you buy the majority of REITs.

QCC, my Canadian baby, is a dog and has stopped paying dividends and basically in run off since it will stop lending until their books are in order.

What should happen

with a big concerted bailout of the automakers is that all the suppliers will get paid and the tell is the major steel company rallies, as well as the major auto suppliers.

I'm getting the sneaky suspicion that bondholders are going to get stuck in all this rut. It's time to buy some wet and wooly dogs.

HOW ABOUT VISTEON?

Buy high and sell higher

Oil shook off the day it tanked. Today is a great day to buy.

Buy the market and Im telling you this is the April Fools Play

Since Bear Stearns dropped, everytime there is fear of bank failure or auto bankruptcy there is mass panic in the market and the market drops excessively.

Today, this is what you call a classic fake out. The big boys have already factored in the bankruptcy and the media is scaring investors out of their shareholdings. Remember Ford isn't in the headlines so it's not the bad news that it appears to be.

I believe the market can be up 200 Dow points from the bottom that it reaches in the early hours. Two days ago was the day to panic. Not today.

Yesterday was warming up for a bonanza of a day. Lets see.

Of course, Obama can say April Fool's Day

And the wise men in DC

should have allowed a massive merger of the big three, downsized capacity, threw out the UAW, provided incentives for replacing old cars with new ones, and focused on the engineering marvels that the research and development of these three mighty firms have. To stimulate an economy, one needs to overhaul the old way of doing things and move into what will work for the next hundred years.

Granted, Ford isn't mentioned yet, but all in due time.

Democrats will never be elected in the Midwest

How the hell can the President allow the states that got him into office face massive unemployment and bankruptcy. Bankrupt those people that flocked to NY, CA, AZ, FL for the boom that got us into this mess.

I can't believe that this is occuring. What made America great was not the banking community, that is only a reflection of the economic might of the US. Well, the hope now is that what happens to G.M. will not happen to the U.S.

Still, assets in the auto manufacturing industry will become undervalued in this market, so be on the lookout for companies with strong balance sheets woefully undervalued.

I am looking, and waiting like a vulture, for Johnson Control and Magna International to get in the single digits. Steel companies are going to sell off but the key to remember about this sector will be the construction boom in infrastructure.

George Soros predicts a 30% fall in commercial real estate

http://www.voanews.com/english/2009-03-26-voa71.cfm

Of course, does that mean it's a bottom? I hate being part of a club that would have me as a member.

The bold and the profitable

Buy oil?
Buy the market?

SRS should be up $10 to panic. But at least the market isn't down 10%.

These are definitely the days that separates the fair weather trader to the one with conviction.

I like John Dorfman

http://bloomberg.com/apps/news?pid=20601039&sid=aXUquXuDKG2M&refer=home

Short Pimco

The greatest investor since the 70s was Bill Gross. Forget Mr. Buffett and read Gross's book and his monthly letter, he's the man and just as engaging as Mr. Buffett.

But as one man rode the biggest bull market ever, and that was the bond market, with everyone grabbing onto his bootstraps, the time to get off is now before getting trampled on.

Short investment grade bonds (LQD), bondholders are going to be taking some haircuts before redemption. And, again, if anyone has ever read Mr. Graham's book, he specifically asks why limit one's upside when the downside is potentially the same for both shareholders and stakeholders. When you buy an investment bond, you want a rock solid balance sheet that is understandable and not yielding too much over treasuries. The current distortions in price, financial reporting, and vagaries in the economy warrant purchasing for speculative (possibly investment) purposes companies with great business prospects when thing right themselves. And they will, just give it time.

Would you call people that take his advice, investors? or traders?

"Futures on the Standard & Poor’s 500 Index fell 2.5 percent, indicating the benchmark index for U.S. equities may pare its biggest monthly advance since 1991. Morgan Stanley strategist Jason Todd said investors should sell (ed: didnt even use the word pare) U.S. stocks as earnings keep weakening. The S&P 500’s 21 percent surge since March 9 trimmed its first quarter drop to 9.7 percent."

Talk about timing. Investing is done when things are on sale. They won't be if earnings were splendid. And what are you going to do, keep it in dollars? Aren't they debasing the currency and questioning the role of the US dollar as a reserve currency.

Just for my own amusement, I was curious what invest is defined as and it came up in two dictionaries as how I understand trading and investing to be.

According to Webster's dictionary, an investor 1) to commit money in order to earn a financial return (this is how Jason Todd would define it and the public understands as trading) 2) to make use of for future benefits or advantages (this is how the public would define it since down the road, markets should turn around-hopefully sooner than later)

According to Oxford's dictionary, to invest is:• verb 1 put money into financial schemes, shares, or property with the expectation of achieving a profit. 2 devote (time or energy) to an undertaking with the expectation of a worthwhile result. 3 (invest in) informal buy (something) whose usefulness will repay the cost.

On a weekly basis, the S&P500 is going to 1000

The powerful downtrend was broken and after a possible retracement of 50% from the top of last week, we should encounter another stiff rally up.

The market is going up another 20%

Looking at some of the stocks that I like and own, I can finally say that ... I'm breaking even. With that in mind, the market can sell off from here, since people want to just break even. And the evidence supports this.

But I want to think that as people break even and sell out, buyers will emerge and move the price high enough to get people back into the market.

Then a sell off can truly begin. This is not based on technicals but on logic.

What's wrong with my blog?

I appreciate the viewership. If people tell me issues they have or would like any clarification on things please let me know.

It is my uncensored opinion but today my friend mentioned that I was at fault on a few things, but wouldn't elaborate.

Regards

I wrote this to my friend who wanted to know what I would do for a conservative account

In regards to management fees of mutual funds, I believe you should not worry about it, but whether it has strong management. If there is not strong management then fees matter.

In markets like this, I believe value investing is the way to go…I own the value fund and am looking to own the international value as well. http://www.thirdavenuefunds.com/ta/ I also like the Fidelity fund you mentioned, but EWC is similar and an etf so it's more liquid.

I would not rush into buying into anything since the markets are overbought. And all the money you are using will not be needed by you and not cause stress of any kind.

But everytime there is a panic, that is the time to buy at a discount. Since you are saving for the long term, discounts add up. In truth there is no telling what will happen, but a conservative approach should help weather the storm. If I was to have a portfolio that captures the trend of global economies and should stay the course in both an inflationary as well as deflationary scenario…All of them should be equal weight and not bought at once…If had my choice of 1, it would be IOO…the second would be tavfx

1) IOO—100 of the largest global cos.
2) SPY—SP 500 (this is optional)
3) EWJ—Japanese stock market has been bearish for 20 some years, and trading way below book value (this is optional)
4) TAVFX—classic value fund
4a) TAVIX –classic internation value fund (either or Tavfx)
5) FICDX - Fidelity fund encompassing large cap Canadian companies
5a) EWC—Canadian stock market (this sector is optional but since you are Canadian)

Since the world may be going to a basket of currencies, a resource rich and balance sheet strong economy should help diversify ones savings.
1) CYB-Chinese currency (500billion surplus)
2) FXC-Canadian (resource rich)
3) BZF-Brazilean (strongest country in s America)
4) JYF-Japanese (fiscally responsible )
5) FXF-Swiss (the swissie has been a haven in time of trouble)
6) GLD-Gold (the barbaric relic)

ALSO SET ASIDE SOME MONEY FOR SPECULATIVE STOCKS IN AN AREA THAT YOU HAVE EXPERIENCE IN…AS TIME PROGRESSES ONE OR TWO OF THEM MAY PAN OUT FOR YOU…DON’T KNOCK YOUR OWN LIFE EXPERIENCE AND KNOWLEDGE IT WILL HELP!!!!!!!!

Missing the boat

I read a few months ago in Old School Investing about ValueVision which was and, I assume, is a value play. But as Mr. Buffett would term it: it's "cigar butt" investing.

On the other hand there are other ways of measuring value and, as such, tend to appreciate and continue doing so longer than people think possible. Today, I am thinking about BeyondCommerce.

While everyone is focused on the new billionaire from Harvard, Mark Zuckerberg, and his social networking site and pouring or investing hundreds of millions into it and like competitors, people are missing the David in all this: BeyondCommerce and its social networking site, Boomj.

It has started from a small base, but actually is focused on making money, not burning it. And the CEO has succesfully started several companies and managed a billion dollar one. While others flock for scraps of success, I'm grabbing hold tight to success.

My only concern is that it will be a ClearWire, which as of yet, hasn't really outperformed or lived up to the expectations of that wonderful CEO, Mr. McGraw. But the idea of bartering and community style businesses intrigue me and may to others as well.

Things don't add up

1+1=2

1) The financials were weak in yesterday's rally
2) Commercial real estate was down early, but closed up.
3) Gold acting very strong in a seasonally weak period
4) Short squeezes, like the one that happened with Porsche, are quick and painful which appears to be the case with short sellers presently. I shorted Apple at about 84 and is now 105 - I mean how high can it go? (famous last words) Of course, I hedge with Cisco, but it has been a laggard until yesterday.

My new theory about bull and bear markets is simply that bull markets go up roughly with periods of spikes while bear markets begin by subtle sell offs then collapses. So the next leg down should be as quick as it goes up. Why? Because everyone that is getting in on this market rally figures that they can get out before the next guy as the market sells off. Which I believe is why the market keeps rallying.

No one believes this rally, still, so it probably can go much higher, but that doesn't mean hedging is inappropriate, but MORE important. TO reduce volatility and have insurance if the sell off begins again in earnest.

I'm confused

on my buy gold signal since that goes along the lines of what Cramer likes. But I call them like I feel them, or is that see them?

The beginning of legalization of marijuana

Obama got elected by the youth and this is what the youth wants.

http://news.yahoo.com/s/politico/20090326/pl_politico/20526

Significance of yesterday

The Treasury secretary of the US mentioned his openness to a Chinese proposal to a more basket oriented global currency. This in effect puts into question the US dollar as the reserve currency of the world. Additionally, it puts to bed the charade of a strong dollar policy. Of course, Mr. Geithner switched gears when the dollar dropped heavily after those shocking and downright unAmerican words.

Treasuries sold off since down the road investors know not what yield would compensate them for holding US dollars. The top appears in, concerning this market. Asset market (and anything not nailed down) valuations are also put into question.

As currencies bounce around, one thing stayed consistent and that was gold. Though I hesitate, I believe it is a screaming buy.

Reynolds of America

won a law suit yesterday and the stock was up alongside Lorillard and Universal Corp, but no Altria.

Is that a discrepancy?

Pharma

I have been noticing Teva and Mylan getting sued a lot for patent infringement. I am not clear if it is because I am reading the financial news more often or the trend for generics is over.

But I do know that it is clearly a time for mergers and acquisitions in the pharma industry. And probably a good time to buy some.

They pay on average, 5% dividend. What's there to hate?

My list is 1) AMGN 2) MATK (at book value) 3) KG 4) BIIB 5) SNY (some news on diversification in food products) 6) BMY (buy out candidate though nothing has happened)

Buy the Peso

I have no idea if it will go lower but the International Herald Tribune had a wonderful editiorial on the benefits of Mexico and I tend to agree.

Plus this book by Don Winslow opened my eye to currency shenanigans down south and believe this is one of those times.

And for that matter as currencies go up, buy the Brazilian Real. Also pays out a nice yield.

My friend was cited in the Daily Reckoning

a site that made me bullish gold back when it was $400 an ounce and Bill Bonner kept pounding the table saying get in because this is it.

Please read it and meditate on the implications....
Kurt Vonnegut said it best "and so it goes..."

http://www.dailyreckoning.com.au/the-lint-age/2009/01/19/

"The rally has been rather disappointing..."

These are the words of Marc Faber concerning long term treasuries...

I mean a $300billion buyout of bonds should imply a huge bond rally but the implication of not rallying shows the appearance of exhaustion and loss of upside momentum.

So for those who don't believe a word a politician says...

Short treasuries

If the theory of the market rally

is for the Treasury to defend the bond market and not the US dollar then why was the price of bonds down today?

About -0.87%

It appears to be a short squeeze. And the news concerning the macro economic picture is very confusing for me. It's very important to keep an eye out for reversals and buying cheap insurance against another market sell off. Even if the market will continue its bullish streak, a 50% retracement of the 20% rise may be in order.

I like JPM puts way out of the money.

JAVA was down today

after the 100% upmove last week concerning IBM takeover rumors and because there was no takeover announced this weekend as traders had plenty of other stocks to push around.

JAVA was a buy today. And if one measures retained earnings as a key measure of book value, I would say research and development for a tech company is the same thing ala Philip Fisher, a name not bandied around a lot nowadays.

It's a sin to be depressed

Sylvia Plath's son commits suicide

Late night drinks with old friends

I met a new friend of mine at a local bar in Tel Aviv on Saturday and I had a hard time not talking about the stock market and where the world is heading too. When my friends from NYC came by to have a couple drinks with us, I had nothing to say but to buy gold.

My Israeli friend was non plussed by the situation and told me that this will be a non financial conversation which is fine but what to talk about? Also, he implied the shallowness of my focus and called into question what the hell I spend most of my time doing. I believe there is truth to this matter since I do get obsessed about certain things to the detriment of other items that are important to anyone's life. But at the end of the night, he was trying to convince the New Yorker to buy gold while I was talking to his wife about life and starting all over.

Flashforward to today where I am walking on Dizengoff admiring the beautiful girls, stopping in every book shop, but not picking up any new clothes for spring nor striking up conversations with any eligible girl; instead I'm always accosted by people who need charity.

I guess I always focus on what's important or the loftier things in life or what the price of coffee is in Brazil, but the truth is it's the simple things in life I crave and afraid of getting...like happiness? satisfaction? success?

The Obama era stocks

So far I have found three unrecognized trends that the Obamas' are spearheading and believe it will catch on:

1) Health food (Michelle is keen on organic): WFMI or UNFI

2) Men's wear: MW or JOSB

3) Internet advertisement backed with person to person contact (in the Economist this week, there was a side article about how Obama is continuing his online campaigning with a human touch): BYOC (Beyond Commerce, a penny stock with 19mln market cap, but led by a man who ran a billion dollar company: yes, 1,000,000,000 - that's 9 zeroes)

Pulled the trigger

on Citigroup since I was up on it and want to focus more on other companies with better balance sheets.

What spooked me is an article in Bloomberg concerning the idea being floated around stuffing bond holders with lower payout or share issuance. This did not come into the equation when I was bullish Citigroup.

Presently, I am more focused on GE. If Citigroup is strong, surely GE is stronger. And don't call me Shirley!

When things are tough

bad things happen. An unfortunate event with a FedEx airplane in Japan occurred this morning and these events tend to snowball. Please be patient with this company since there is able and visible management with a business that is hard to replicate and in demand 24/7.

This quote

was taken from the blog coffeemessiah.blogspot.com and is true about democracy and capitalism. Humans need to grow and learn...it's in our dna.

To exist is to change

to change is to mature

to mature is to go on

creating oneself endlessly.

Henri Berqson
French Philosopher
1859 - 1941

Makes No Cents

1) Oil was up again on Friday but the drillers were down and have not broken out as of yet(?).
2) Gold was down but not the miners.
3) Silver was up but not PAAS and SSRI
4) Financials were down, but not C
5) The price of U.TO (proxy for uranium price) was up but Mega Uranium had a big sell off

Disparities abound. And disparities will always exist. But not for long.

Commercial Real Estate

was a laggard during this fabulous run up we had in the market. It would appear that a continuation of the downward motion may accelerate as the market sells off its overbought condition.

Now to be really bullish

The market has to stay in the green. Not by a lot but up.

FedEx misses earnings

But they still made earnings. And if someone out there actually invests and doesn't trade then earnings divided by book is what you are earning and that percentage is greater than keeping it in the bank. Additionally, you are getting those earnings below the recognized value of the company so then one needs to divide earnings by share price which in this case is $1.26/43.05 (last night's close)=2.9% and that is only 3rd quarter earnings.

From a great writer - Samuel Beckett

The question of bad economic news with a nice, stiff market rally is best summed up by this famed writer whose letters were just published.

"Miss Costello said to me: 'You haven't a good word to say for anyone but the failures.' I thought it was quite the nicest thing anyone had said to me for a long time."

In short, honesty is the best policy and the market is reflecting that.

If

the market can actually go up today would be very encouraging.
One small little hint is that Citi is up at the open. Of course, that can change.

Follow up to the Pounded Pound

The Pound is attempting a double bottom. It is not in worst shape than other countries. Additionally, Gordon Brown is on the way out, as is his liberal party. This may indeed be the only country of late which will have a conservative government in power (this concept was brought up to me by my friend). The UK has faced rocky roads before and this is no different.

Though some might sing "Anarchy in the UK" it's not going to happen.

What's the Scor?

comScore keeps statistics on internet use. I liken this to the early days of ratings agencies because at the end of the day, advertisers and businessmen need to know where the eyeballs and pockets are going to in the virtual world.

Armed with a passion for statistics and showing up to work and trading below book value is a worthy place to park ones money.

Yes, there are many competitors, but that is business...

But as Woody Allen says, "90% of show business is just showing up."

At what point in time

can you buy FedEx below book value?

I'm looking at ValueLine and don't see that ever in its statistical study.

Something smells phony

As this market set up for a vicious rally I noticed a few things of which none has occurred!

1) Barney Frank spread the word that the uptick rule is being reconsidered.
2) Mr. Pandit and Mr. Lewis claiming 2 months of record profits, excluding this and that, and gee just two months...lets see some annual or semi annual profits!
3) Mr. Immelt saying that GE has the fortitude to withstand Armageddon (granted I don't want this to happen).
4) F successful negotiations with the UAW and GM declining an additional 2 billion of aid.

The timing appears to be orchestrated to have maximum effect in squeezing the short sellers. But that doesn't mean this rally isn't sustainable.

The Economist a more reputable source of information

and definitely better written has come out in support of legalizing drugs.

The stats, background, and historical perspective the magazine provides is truly a worthwhile read and the amount of sentences I underlined is truly astonishing.

The US spends $40 billion a year on drug reinforcement and yet as far as I can see it doesn't work except for catching Coolio's crack habit. (I remember that I read, I believe, in Rolling Stone magazine about 10 years ago how Coolio mentioned that he "cracked" his drug habit by being alone in the forest or some sort like that) Additionally, the incarceration of drug addicts creates a negative loop that prevents them from advancing in society and what would have happened if President Obama was caught in his early days? Like the concept of banruptcy where a man can start over, this should occur with drug users; many of whom are kids who really don't know better. An amusing side note is that having family support to some is like being locked up.

Fear shouldn't be the rule of the day, but understanding what is occurring in the world now! The black market is almost like an invisible government with money, guns, and organization and to some degrees is treated like gold is to monetary stability-not relevant. Lets face the fact that we can burden ourselves with a war that has gone on longer and killed more people than Iraq and Afghanistan and cost more money.

And getting back to fundamentals, the US was founded on tobacco growers. The constitution was written on hemp. If one is truly a value investor and understands what people want then buy fearlessly companies that sell an item that for at least a moment in a persons day, he is at peace with himself. Tobacco may be unhealthy but so is 1000:1 leveraged balance sheets which causes downfalls of governments, but where is the outrage?

I believe Altria is a play on the possible legalization though drug companies may be the winner as they will be able to tweak the drugs. Though Universal Corp would benefit as it is the provider of tobacco leaf and could easily set aside land for the cultivation of hemp.

So when the world wakes up: GOLD, NUCLEAR, TOBACCO will be the winners. Human nature doesn't change, but governments do.

Printing Carbon Credits Plays and

it just doesn't add up as to why they are selling off the way they are. Can't people look at the big picture here?

USEC has the risk that its new centrifuge won't work but they are still the only show in town concerning enriched uranium.

NRG and EXC and CEG are nuclear utility plays with a heavy debt load. That doesn't equate to bankruptcy since savvy investors can see a little further ahead than a year and anticipate the demand for carbon free utilities.

Although CLH and SRCL are waste recyclers in a specialized industry, VE and WMI are leaders in waste management and a crucial player in the reduction of waste and its carbon emissions.

ORA is a company that specializes in the cleanest and least likely to leave a footprint energy - geothermal and has production throughout the globe, Kenya was the latest.

All of these have tremendous cash flow and should be bought for the long term...it will be like printing money ala FED...

BUY CRUDE and the POUND

Oil is consolidating its strong surge and is ready for a move higher.

As for the Pound, I believe the Pound has what you call a double bottom. Place the stop 8% below the 52 week low. Wherever it finally winds up, it should have a nice rally.

A mining rally in the uranium sector?

Cameco had a huge rights offering and the stock has actually stayed strong after the news while selling off before.

I think people are expecting them to make some timely purchases but the small cap companies aren't appreciating on this. Is this a discrepancy?

It won't be if this actually occurs!

I'm American

and have made scoffish remarks concerning the French and Europe in general but it's like rooting for your team and booing the opponent. But now the opponent has joined our side - capitalism.

The fact remains that the French are doing something right in business. Everywhere I read, Sarkozy is making deals and pushing for bigger slices for French companies.

1) Areva is signing contracts where the US should be, concerning nuclear plants.
2) Total is building new oil pipelines where others, due to political constraints, fear to go.
3) Veolia has the game plan right with a portfolio of water, waste, energy, and a fat dividend.

Barring a global conflict, shareholders throughout the globe will be rewarded, as the big guns realize that Sarkozy is a capitalist with a good looking wife.

Waste Management

The Economist about a week ago had a great insert on waste management throughout the world and I am sold on it, but it appears the market is not so believe it is a good buy.

Today, even with possible dividend cut, VE looks good as does the stalwart WMI.

Mr. Pandit's key line from his memo

...and where we are today, including our full commitment to our global network and presence in over 100 countries, which is our key competitive differentiator

If the world is not going to hell, then you have to own it - even if it is for trading purposes.

Citi is up 20% .Now it just has to go up 400%

Still the trend is down so fade the open, sell the dogs, and buy, as Smiegle says, "my precious."

Like Gold---long term
Like Oil---supply is limited
Like time and state of mind---not enough of it with such depressing state of affairs

and anything else you like, for me it's stocks.

So far today deserves a

:)

Carl Icahn has a good streak

with biotech companies such as Imclone (granted it's the only one I can think of but I am extrapolating) so why not Biogen (BIIB)? Stop is 52 week low.

Goofball Investing vs. Looking at the Situation & Understanding history

Wal Mart is down on union fears which is valid since the last decade we experienced a backlash to Wal Mart's style of business, but that would imply all businesses that have profited at the unions expense will reverse.

Kroger's which has been a staple for over a 100 years is trading with a PE less than 10 and a healthy union agreement. Kroger's faced the US economy throughout the turbulent 20th century and will do so now. So while investors bought Wal Mart they should have been buying Krogers.

US Steel operates with a union and a healthy relationship and has been around since J. Piermont Morgan merged his steel operations with Andrew Carnegie's, again over 100 years ago. Another centarian, AK Steel, formerly the first adapter of scrap steel (I believe) known as Armco, operates with a union, albeit not always on such great terms. Nucor, which every Tom Dick and Harry flocks to, has become what it is from not having a union like Wal Mart. Don't read the balance, but understand the trend!

Short Nucor till the cows come home, and buy Steel. Nucor, like Apple, have seen their better days. And short any other company that is union free and made outlandish profits as a result. One can even short Wal Mart since the stop would ultimately be its 52wk high.

Of course, Nucor could be bought out, but I would say the indicator would be they sell off their scrap brokerage, David Joseph. That was by far a lousy purchase which we have seen several cash flow rich companies to have done only a year ago. Look at what Dow Chemical is stuck with now!

Long Kroger/Short Wal Mart
Long US Steel/ Short Nucor

Shotgun marriages--

Obviously bankrupt autos and failing mega banks and quite possibly large looming refinancing are the culprit for this shenanigan.

1) Could GM, F, Chrysler form a national auto company? could a foreign auto firm buy them out?

2) Could Citigroup be bought out like Bear Stearns?

3) Could GE be telling the (business) truth?

4) Are the unemployment numbers the worst?

We'll see. Stay tuned!

Luck of the IRish

As St. Paddy's day is coming up, the 17th of this month, go out have a beer and buy that cheap stock Ingersoll-Rand (IR).

They are moving their headquarters from Bermuda to Ireland and again shows the leadership of the company who employ US citizens but also watch their cost basis by moving to areas that protect shareholder wealth.

Unfortunately, Berkshire Hathaway owns it and I have been noticing that anytime a value investor of note buys a dog it stays that way for quite awhile, but when you least expect it this stock may double in price while getting paid a dividend.

There is tremendous moat in this company and growth in air conditioning if we can start building up that hot area called Africa. But first we got to kick out that tyrant in Sudan.

St. Patrick was known for converting the heathens to God abiding citizens in Ireland, PEACEFULLY, so why can't we do that in Africa?

What the market needs is spinach

Pluto is bashing Popeye and Olive Oil is frantic. Where is the spinach going to come from. Liquidity seems shot. Investors have given up hope. GM is broke.

Hard to say, but it always happens, at the last moment, or in the waning minutes of any given episode, Popeye gets that spinach and saves the day.

Buy???????

Classic Big-Cap mistake

VocalTec's biggest shareholder, Cisco, sold back its shares to the company. I believe, like all market bottoms, it was time to increase its stake; especially since it was trading below value. Instead, it's rumored that Cisco is looking to buy VMware. Since shareholders don't know any better they dumped more VocalTec shares into the market.

What I believe you are seeing is the case for Cisco to take a tax writeoff as opposed to profiting from the immense opportunity that VocalTec may yet poise.

Remember the big mining companies sold world class mining properties to juniors when commodity prices were greatly depressed-this could be another example of that in the tech world.

Lets see where it goes from here!

Flowers (FLWS) vs iPods (AAPL)

This past generation was trained to download music and videos, post profiles, read the news and share stuff via the web and even auction stuff off, but as time passed someone came along to offer it at rock bottom prices, or as the Beatles sung "the best things in life are free..."

But you cannot do that with flowers. Who really likes the fake kind?

In the heart of the depression, 1931, flowers were in demand as evidence by my favorite Chaplin film City Lights concerning Chaplin's love of a flower girl.

Before people were trained to buy diamonds, they bought flowers. Louis XIV was obsessed with them and are still a great draw in the Versaille.

And as spring is coming, and the air becomes pleasant with budding trees, birds chirping and young lovers hearts beating, say it with flowers. FLWS

More thoughts from my friend Aaron who has been very right concerning the trend....Please read!

I hope everything is finding you well.

With this market taking a steep 4% drop today across the board, I decided it was time to share my market view today.

First, I want to start off by stating my positions as follows:

US Equities: Bearish

-Caveat: Market is quite oversold; I would not take big short positions if any at all.

--US Equities are headed for 5000 Dow and S&P 500 to 500. I view this as a conservative forecast that does not take into consideration any sovereign credit defaults or other major events, such as massive global nationalization programs.

International Equities: Bearish

-Caveat: Likely markets are more oversold than US markets.

US Treasuries: Bullish Short-Term Maturities, Neutral Long-Term Maturities

-Prefer to be short-term, which is either 3-month or less TBills. Longer term maturities, such as 5-, 10-, and 30-year, will likely perform well if there is a significant rally due to deflation. The deflation/inflation dynamic is clearly favoring deflation, but the unequivocally massive fiscal stimulus plan and aggressive expansion of monetary policy the Federal Reserve have put in place a ticking inflation time bomb. High-yield savings account and certificate of deposits of 1 year or less may eke out a better return than treasuries. However, keep in mind FDIC insurance limits, etc.

Foreign Exchange Spot:

-Extreme Bearish: Russian Ruble

-Bearish: EUR, GBP, NZD, and AUD

-Bullish: USD, CHF, and JPY

-Neutral: CAD

--Currencies on my bearish list are quite oversold, however, non-leverage to mildly leveraged positions in EUR and GBP are worthwhile, because they will likely go parity. The EUR also has a possibility of breaking up due to weak economies pushing the currency hard against the wall. A break-up of the EUR would also contain major downside event risk that would domino into other markets.

--Currencies on my bullish list, specifically CHF and JPY, are better buys now than before as they have sold off making them 2 great currencies to create a basket with the USD when shorting weaker currencies.

--CAD has the ability to be a stronger currency due to it's banking sector being one of the strongest in the world due to its relatively ultra conservative balance sheet. However, commodity prices are likely hampering its ability to appreciate.

Commodities:

-Oil: Bearish (Short-Term); Bullish (Long-Term)

-Gold: Bearish (See 400 dlrs/ounce)

-Softs: Bullish (Long-Term)

--Long-term bullish as it may be the best inflation hedge down the road. Shorting US Treasuries may be fruitless if they are artificially kept down by the Federal Reserve. However, there are two ways to play this one. One is to very slowly build a position, or the other is to wait and buy later in the year. Commodity prices still are being pulled down to deflation and struggling economies.

A couple of interesting market movements that I witnessed.

1.) VIX- an index that measures the cost of using options as insurance against declines in the S&P 500 -jumped 14% percent to 52.65. For historical perspective, I recall that VIX was in the low 10s when I was trading options in 2006-2007. We have seen the 80s last year, and it's quite possible we will continue to have levels in the range of 40 to 60. This quite simply means that buying put options to protect against further losses is no longer cheap. And, if people cannot afford to buy them economically, selling their shares may be the next best thing, which will likely further the sell off that began today.

2.) Twelve (12)-Month US Treasury Bills ticked down about 0.06% to 0.64%. Why care about short-term cash rates? These last couple of weeks we saw the market start to show some improvements. Typically, these improvements have been due to short-sellers closing positions, which drives the prices up. In this particular case, the 12-month Treasury Bill started to improve its interest rate to 0.70% from 0.60%, which indicates money is coming off the sidelines to buy cheap stocks. However, the reversal is illustrating that buyers were burned by their eagerness to come in too early. In order to really consider buying stocks, one would have to see cash rates rise in yield to over 1% on a 12-month maturity, and it would have to come with economic improvements.

3.) There are number of fundamental stories that have hit the wire.

A.) AIG, the big insurance conglomerate, is proving itself a thorn in the side of the Fed and Treasury. $30 billion dollars of more financial aid is going to be required to float this sinking ship as it took one of the biggest losses in history ($.42/share).

B.) Citigroup is still fighting off nationalization rumors as its shares continue to plunge (1.20/share).

C.) Fannie Mae, now under conservatorship, continue to eke out major losses like $25 billion.

D.) About 5 to 6 banks in the Federal Home Loan Bank system, a government agency setup to provide discount loans to commercial banks, have taken steep losses. As a system, they have collectively lost about $300 million in the 4th quarter. See Friday's Wall Street Journal for more details. Most of these losses stem from private label mortgage securities that are now being classed as impaired assets. These losses potentially make it a target for conservatorship like Fannie Mae and Freddie Mac and impair its ability to issue debt cheaply in order to provide discount loans. The banks hit hardest are those loaning in districts like California, Florida, and other hard hit states. What's important in this story is that so many lending institutions rely fairly heavily on this system for liquidity at cheaper rates. However, it's important to note that the Federal Reserve has stepped in quite a bit as a competitor. Does the story matter? Only, if it's bailed out to tune of tax payer dough and more debt issuance.

E.) "Consumers put aside 2.9 percent of their disposable income in 2008’s fourth quarter, the most since early 2002, the Bureau of Economic Analysis says. Deutsche Bank AG economists led by Peter Hooper say savings may reach 9 percent within two years after falling to zero in the third quarter of 2006" (Bloomberg). This is important, because the US has fueled its growth through the consumer. For the US to snap out of a recession, a new driver of growth will have to show up at the door, or consumers will have to regain their confidence. Until then, this could be the biggest problem for the US Economy. So getting long the stock market really requires a thesis that can explain how this economy turns itself around. The major deleveraging at work here, the inability to get good credit terms, etc. will also impede a fast snap back in the markets.

More importantly to think about, China has grown through the US consumer buying its cheap products. China has bought massive amounts of US Treasuries in this exchange. Note, Hillary Clinton is literally begging China to continue buying our debt. A sudden reluctance could cause sharp increases in US Treasury rates, which is why being in short-term maturities is a much safer play. We could see 22% interest like the late 70s and early 80s out of the Carter administration.

F.) Why short the EURO and Pound? The EURO suffers from not acting fast enough on its monetary policy front, that is they did not lower rates as fast as the US did, and they may have to take much more drastic actions as a consequence. They also have a number of weak countries within the union that require bailouts. And, there is risk the currency could fail in its efforts to be a unionized currency. Deutsche Marks anyone? There are also eastern european countries that are interwoven into the European economies. A sovereign default can spark a cascading event.

The Pound has suffered losses on its late to the rate decrease party. British Central Bankers are poised to lower their overnight lending rates to 0.5%- nearly matching US Central Bank's 0.25% rate -as well as engage in quantitative easing. As a smaller economy, the perceived vulnerabilities have lent the US Dollar as the reserve currency and flight to quality currency of choice. British has suffered just as catastrophic bank losses, bank runs, and threats of bank nationalization semi and full.

G.) Pay caps and government bailouts. Catch-22! While banks that take money should be required to cap excessive pay, the top producers will take their relationships else where. And, the bank falls flat. What do you do? If the bank's going to fall flat, why bail it out in the first place. And, this is fundamentally the problem in the marketplace. Investors are fearful of the current administration attempting bank nationalization. There is no investor confident in the banking sector as long as this remains in the air. Even Ben Bernanke does not have the ability to put the kibosh on this one, i.e. he might just fall in line like a good soldier. And without a proper banking system that is efficient and savvy, business becomes just a little bit more expensive. And, if it is politicized, more confidence will be zapped.

---Bottomline: The fundamental condition is still weak. And, this recent stock market drop is more evidence investors are losing confidence in the market. And, it is my contention that the broad market indices will have pared off at least 40% by late in the year if not sooner. I would look to the 4th quarter of 2009 to re-assess where the market is and where it can go. At the moment, cheap stocks are just getting cheaper.