Special Note

Investors411 2012 Yearly Investment Outlook

is in the Stock Section Below


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One Big Party

The news of the morning - The first Florida prediction poll is out since South Carolina and its Newt +9%. Its only one poll, but there is a change in momentum. Its way to early to call this race.

Some interesting political analysis  ”Mitt Romney’s Misery in a Word Bain “(Politico)

Clearly Republican voters in South Carolina felt Gingrich won the debates, but there was another even more significant factor.


Super Pac Money


“There are probably less than 100 [obscenely wealthy] people fueling 90% of these Pacs”

LINK

In Iowa it was Romney’s Super Pac that spent millions on negative adds against Gingrich. He was caught flat footed. He obtained one agreeable billionaire and created his own giant super Pac They smashed Romney with negative adds in South Carolina and spent just as much money as he did.

Florida Super Pacs are already in full swing with the vast amount of money not spent on building a case for constructive ideas on how to help fix out economy, but scathing negative character assassination.

Everybody says they hate these adds, but the reality is they work. Romney beats Gingrich in Iowa by going negative with his super PAC and Gingrich beats Romney in Florida by going negative with his.

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In the last election we saw a massive amount of money go to Obama from Wall Street. Almost every progressive will tell you Obama has not delivered becuse he is influenced or ownd by big money.

Sure there is a difference between Republican views and Democrats (watch the debates) But in the end to compete with the winner of the Republican Primary Obama is going  to need his own Super Pac’s to go negative.

End result

A group of wealthy oligarchs determine the outcome of what used to be called


Democracy


We are slowly morphing into one big party

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STOCKS

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Wall Street Bull and OWS Symbol

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Short Term Outlook

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  • Earnings reports continue to be the #1 focus. Semi & Housing Stocks are leading the bulls.  Obama’s State of the Union will be of note. Global healing editorial.
  • Repeat from Friday – “We have confirmed a higher high on the benchmark index — the S&P 500 (link to chart of S&P near top right of blog). This is a higher high on the charts and longer term its bullish.”
  • Our #1 technical forecasting tool, the McCellan Oscillator (MO) fell slightly to +52.63. 50DMA at +2.72 (for more see  STRATEGY link at top of blog) Just below overbought territory = NEUTRAL/BEARISH

  • From Friday – “We are in a low volume rally. This means the manipulators (central banks, HFT’s and other giant sharks) are in control.” Sorry I haven’t got the details on how this is happening, only a recognition of its existence (see yield rates falling below) Low volume rallies can last a long time as we saw when the Fed introduced quantitative easing (QE #! & QE #2)
  • DAX down this AM 0.57% at 6:00 AM EST. Italian bond’s two week long yield fall puts it well out of the 7% danger zone at 6.13%. The Spanish and Italian bond reversal shows some economic stability returning to two of Europe’s largest economies and is bullish

Overnight Data From Europe

Germany’s DAX

Italian 10 year bond

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2012 Stock Forecast

The Raw Data

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Those of you who are long term investors in the markets and have been with Investors411 for years know that (except for unforeseen events) the yearly forecast has been very accurate. For an overview of why go to the OVERVIEW section of the blog (see top bar of blog)

Most of the Raw Data will be presented this week and a conclusion over the weekend or next week.


NB – Three parts will be presented

The Good, The Bad and the Ugly

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Chart by Cam Hui from his editorial Global Healing

The Good


In 2009 Obama took over Presidency of the USA. Financial Armageddon was predicted and we entered the greatest worldwide recession since the Great Depression.

The following is a list of the changes and the trend flow since then.

  • The stock market has doubled (Thanks to Paul R for heads up on this)
  • USA GDP unexpectedly fell to over -9% in the quarter before Obama took office and now its at @+2%
  • Monthly Jobless claims were at - 750,000 per month in early 2009. Today +200,000 per month (seasonally adjusted I’d say +150,000 is more accurate)
  • A record setting -599,000 have been eliminated from government. If these jobs were still in existence the monthly jobs growth figure would be higher.
  • US corporations are sitting on more cash than ever before ($1.9 trillion) Most company profits are again beating expectations.
  • Relative to the rest of the world – Japan (tsunami) India & China (GDP in decline) Europe (crisis) – the USA is outperforming (Thanks to EW for his heads up on this)
  • While it may be just a little too soon to call the trend, there has been a three month surge in housing stocks The fall in housing prices was a dominant factor in the great recession.

The USA under Obama and his Fed Chair Bernanke is in a slow steady recovery with little sign of inflation on the horizon.

Later this week the Bad and the Ugly




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Paul’s Corner


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Box 7 Stocks

There are many ways I search and select stocks. As I have shown several times I use a “High Demand” search available in HGSI. I posted a review of the latest High Demand search in the comments section this past Saturday.

Link:

Another favorite of mine is to use HGSI and search for what we call “Box 7” stocks. A recent Your Stock List 2012 winner FTK was found using the Box 7 search.

Many years ago my good friend Ian Woodward (HGSI) found that if one would qualify a stock by its past 5 years earnings history and its current growth you could get an idea how fast the stock would grow and as a result your wallet would grow.

Ian devised what he calls the “Nine Box Matrix – the Rule of 72” where you can place a stock, depending on its earnings history and growth, and evaluate its expected growth. He was kind enough to prepare a Power Point presentation for Investors 411 readers explaining the Nine Box Matrix. Ian’s Power Point gives you the history of development and examples of some winning stocks.

Link:

Looking at Ian’s Nine Box Matrix we find in Box 7, stocks with a past earnings history of 15 – 25% and a current growth rate of >100% for the last 2 quarters. Many call these stocks “Turn Around Stocks,” stocks that have stubbed their toes and are recovering, or stocks that are new and are accelerating. Box 7 stocks can provide some real rocket ships; FTK for example.

Page 10 of Ian’s Power Point shows Box 7 stocks selected back on Dec 10 and their current standing last week on Jan 17. Look at #2 FTK with a 34% gain!  Keep in mind not all Box 7 stocks give this sort of return, but with some careful selection and a market with the wind at your back they can be fun!

This Wednesday in Paul’s Corner, I’ll post a list of current Box 7 stocks for your review.

HGSI has a 45 day free trial:

My usual worthless disclaimer applies!


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Longer Term Outlook

3 months+

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Still

CAUTIOUSLY BULLISH

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AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK AND POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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