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Wanting Obama & America to Fail

I may criticize Obama and before him Bush, but I never wanted them to fail. Our politicians have gotten so partisan that Obama’s failure has become far more important than solving problems that confront our country and the world.

Richard Shelby (Powerful Republican Senate finance committee minority leader) – has held up 70 Obama appointments because he wants “earmarks” (special compensation) for his state of Alabama. The Huffington Post  labeled him Mr. Roadblock after Shelby held up the nomination for chief of the General Services Office for 10 Months . She passed 96 to 0 . Additional story here . Buying votes has overwhelmed US politics. But this case was just way too blatent.

PIGS

- World Market’s stocks plunged in an aftershock of the financial earthquake that hit last Oct. 2008. In 2008 it was the huge shadow banks that stood on the brink of collapse from over leveraged debt bombs called Credit Default Swaps.  Iceland’s economy is still shattered because it took on too much OVER LEVERAGED debt.

P ortugal, I reland, G reece, and S pain are now in trouble. You can add Great Britain and all the former Soviet satellite countries.  They bought into the unregulated free market capitalism and now like financials are suffering.  They are selling their debt at much higher prices than we are.  Are other countries going to fall like Iceland?- Bill Gross (big bond seller) editorial

Here’s the problem nobody knows how bad or over leveraged things exactly are because there was little regulation.

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!

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

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

Worldwide stocks dropped in big, above average volume on fears of a credit meltdown in Europe. (See above) This, added to China and some other emerging markets pulling back on stimulus has driven all major indexes to yearly lows = Bearish

Jobs number -  Headlines -20,000 job losses in January (about what was expected) 9.7% Unemployment rate . Don’t understand how they got this number – down -0.3 % and not seeing job creation).  Seems implausible. They did a yearly revaluation. Basically this is good news for stocks .

Significant indexes

• McClellan Index fell to -70.88 = Oversold. How low or oversold can markets get before rebounding. We did reach @-93 about 3 days ago, about @-115 last November & @ -130 back in the fall of 2008.

• BDI – This chart shows the Baltic Dry Index (scroll down) , a measure of shipping costs, Has broken through a major month long  support level at @ 3000 .  Yesterday the BDI rose +12 at 2685.

Analysis – Oversold conditions means we are closer to a buy than a sell. Two major questions.

• Is this correction going to grow? Technically the answer seems to be yes . The charts are showing now 4 major down days in big volume. We are at yearly lows and the McClellan Oscillator is at -71. 3 trading days ago we hit -93 and the markets were at a higher low. All this is Bearish but oversold markets are when to buy.
  
• How to play the dip When everyone else sells you buy. The bigger the dip the better your chances. Of course this works best for a short term trader, who is willing to buy the dip and sell a few days/week later.  The more a longer term investor is in cash- the more its time to nibble.
  

Positions

The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends – will try to update last few weeks today) – These are positions I actually own

SELLING & BUYING

Here’s stocks YOU suggested  to add to the Watch List. – Will try to analyze stocks over weekend.
GS, JPM, CSCO, SHOO, ICON, SOA, ALF, VSEC, BIDU VPRT

ETF’s -  6% of portfolio FXI (China), 5% EWZ (Brazil), & 10% MOO (Agriculture) -  Total 21% invested. Sold 1/2 position or 5% of portfolio of EWZ yesterday at $65.1 . This was bought at $52.8 back in July. A +23% gain

I will be adding to positions (hopefully long term) today, hopefully in a dip.

The strategy .  Buy a position in an oversold market and sell 1/2 of it when it gains 5 to 10% and let the rest ride.  The position should take into account major trends that you understand. For me China, Emerging Markets and Brazil still fit the bill. However there are concerns about a long term US/China trade war. Also any of the ETF’s that do 2 & 3 X what the major US indexes do.

Long Term Outlook = NEUTRAL

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

A Fat Butt from Google (see below)

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.

The Good

• Emerging Markets – The regulated capitalist economics of emerging markets have exploded over the last decade. This is primarily due to globalization. But countries with abundant natural resources are also benefiting. From India to China, one generation worked 15 hour days in a rice paddy and the next were computer programmers. In fact many of these countries never even entered a recession in 2008 & 2009. Globalization has positively impacted billions of these people.
  
• European Union -  We used to be thought of as the melting pot, but this collection of countries and cultures now has the world’s #1 GDP.  Their tax rate is higher than ours  example Denmark @ 45% vs @US 37% – ugh) but they have great social services (example health care), live longer, less infant mortality, better health, @20% the crime rate, @ 20% the murder rate, no huge upcoming Medicare, Social Security or Deficit crisis. They are not perpetually fear mongered as in the USA and do not have an 200% increase in weapons budget (as we have had in last decade) to look forward to
• Free Markets are NOT self correcting – Perhaps this lesson has NOT been learned in the USA, but it has made an impact in the rest of the world . The bubble and bust stock/sector/country cycle of unregulated capitalism (“free markets”) has had a demonstrable and extremely negative impact when the tech, housing, & financial bubbles burst. The blind unregulated  pursuit of capitalist greed simply does NOT work. The Dow started the decade at 11,000 and ended at 10,500. Nobel Prize winner -  Joe Stiglitz lessons
  
• Economic Meltdown Averted – We stood on the edge of the cliff in 2008 and, at least for now, a catastrophic economic meltdown has been averted. Yes, many of the same individuals who helped cause the crisis also helped avert it.  Yes, government, that usually was a safety net for the poor, elderly was used to help the rich shadow financial institutions. Yes, government stimulus worked, but the deficit grew.  The rich have taken money from the working poor and the average taxpayer, but we all survived an economic collapse.
  

Coming up tomorrow the Bad and the Ugly

New Years Resolution

The Huffington  Post blog has come up with a great new years resolution - Why not put your money in your local community bank instead of those huge financial shadow institutions that created the economic meltdown? Your local bank is FDIC insured for $250,000 and their GREED did NOT cause the financial meltdown. Stop crying, whining and getting angry, but sitting on your butt (hopefully smaller) – Do something – invest in your community bank

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!

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

US markets got toasted in the last 1/2 hour of trading for the year.  Volume was again very light. McClellan Index at -1.62 = NEUTRAL

Friday’s monthly  jobs number is the major known economic event of the week. More and more analyst see a V shaped recovery.  While this, on the surface, is positive you start to worry about too many experts being bullish.

FEARLESS FORECAST FOR WEEK – A very good jobs number might actually be bad for stocks on Friday. It would set off fears that higher interest rates would happen sooner rather than later. Stocks usually do poorly when interest rates rise. Simply, potential investors see rising rates as a better investment the higher they go than stocks. Weak volume offers no clue to market direction, but the McClellan is headed lower -  so forecast – Up at start of week and decline at end. = FLAT Week

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

Sold all of UWM for +2% gain at years end

Coming soon – Results for 2010.

Long Term Outlook = CAUTIOUSLY BULLISH