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2010 Economic and Stock Forecasts

To make an overall forecast let’s look at the past decade and year & the mega trends So here’s the Good, the Bad, the Ugly Almost all the Bad emanates or is focused on the USA

The UGLY

  • Nothing’s Been Fixed – In fact the zombie or shadow financials are less transparent because they were allowed to drop standard mark to market accounting. Too big to fail and the systemic risk of one big institutions failure taking down the whole system sill exists. All the Fed and Obama administration (like Bush) has done is give/loan trillions to troubled financials (include AIG, Fannie & Freddie) at incredibly low rates.
  • Lethal Combination Growing debt and growing weapons production -  Imagine you had a neighbor who owned over 1/2 the weapons in town and he was increasing his weapons budget by up to 20% each year.  Now imagine this same neighbors debt was growing by up to 10% each year and he had some huge additional debts coming due. This neighbor is constantly shouting how afraid he/she is and has shown a willingness to fight. The son of this neighbor is an expert at video games based on mass murder. The neighbor to the rest of the world is, of course, the USA
  • Reality Check – Like Japan who has lost several decades the USA lost the last decade economically for 98% of the population (all but the richest) Future economics is NOT going to be anything like the past – tighten your belt – Era of cheap oil is over, Era of expanding credit card debt is over, era of endless housing boom is over, era of expanding weapons production is growing, era of expanding federal debt is growing, era of globalization negatively impacting US working class growing, era of disfunctional/partisan hate in USA is growing, and the era of the shrinking working/middle class is growing.

In spite of all these negatives we’re still a functioning democracy whose science, education and business sectors know how to innovate. The problem is the hole we dug over the last decade is not going to get filled in a year or two. Perhaps never.

Tomorrow – Conclusion

Health Care

FEAR MONGER - How to get health care passed -Simply put fear mongering works on Americans.

45,000 people in the USA, according to a Harvard study, die from lack of health care each year.

So let’s take 3000 of their bodies each month (@3000 died on 911 &  12 months times 3000 is only 36,000 and less than 45,000 ) and put them in a bomb filled building. Then put other bodies in a bomb filled remote controlled plane and blow up the building each month.  If the explosion and flying body parts were gruesome enough we’d get great coverage. We’d tell everyone anti health care terrorist piloted the planes. Each month we’d have an event like 911. (See photo above) Shock and awe! – Monthly 911′s

On a more serious note – a great graph by Nate Silver on health care costs and life expectancy by country. Also the size of each  circle represents the # of doctor visits.

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary

AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING!

Index Percentage Volume
Dow -0.11% down
NASDQ +0.01% down
S&P500 +0.31% down
Russell2000- -0.25% -

Investors411 record – 5 years of beating benchmark S&P 500 and most major US indexes

Technicals, Fundamentals & Analysis

Most Sections of blog have been revised or are under construction for 2010 See Positions , Strategy , and Overview for changes

Markets held onto most of Monday’s gains in decreased volume. 15 of the last 17 Mondays have been bullish/up days. This is an established trend shorter term traders may want to take advantage of. Mergers and mutual funds investing are usually listed as reasons Mondays are strong.

  • McClellan Index at +27.30 = A bit overbought. This means we have some wiggle room for US stocks to move higher before they reach +60 or overbought territory or a time to lighten up on positions. There’s a long way to go till we reach @-60 or a time to add to positions.

Trading – Learn from your Mistakes

Avatar/IMAX – Over the last few week I’ve gone overboard about the IMAX 3d technology and the Avatar film. What I did NOT do is invest directly after the open or when IMAX dipped last week. IMAX in a joint venture is coming out with 3D TV channel in 2011 and the film now has grossed over a billion dollars.

  • Mistake – Not buying the dip
  • Mistake – Understanding that fundamentally (like NVS with the swine flu scare) IMAX is a technology that has reached a tipping point and going to move higher.

Traders – Two other of YOUR choices SEED & HMIN have had major moves and are also worthy of consideration. I will open a minor position in IMAX, or any of above in a dip . Hopefully, build position into a long term investment

Ideally – You’d like to buy when overall US markets are in an oversold position,

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own

SELLING & BUYING

Results for 2009 +35.5% Results for 2008 -13% See POSITIONS (scroll down) for details

Long Term Outlook = CAUTIOUSLY BULLISH

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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