I always try to look at the long term picture.

That is the reason I missed being long this rally in 2009, but did not miss
the selloff in 2008. When I see a change in trend from a technical point of view
I first wonder what is going on and then look for a reason that might be causing
this change.

Economists look at numbers that have been generated and make their
conclusion from HISTORICAL information. I go the other way. The market is
whispering to me that something is happening. I am listening to the motor in
the car and it is making a different sound; economists are looking in the
rearview mirror; that is why I say don't listen to anything they say.

There are some who have the ability to look at certain statistics and
make good forecasts. Harry Dent, Mohamed A El-Erian, John Mauldin and a
few others. Almost none pay attention to market psychology that reflects the
mass psychology of world investors. Almost none factor in the individual
narcissistic personal psychologies of major players such as Ronald Reagan,
Alan Greenspan and Barack Obama. Individuals play important roles in
market direction. They can move markets for a while, but the overall trend is
too big for any one person or even groups of persons.

Point in fact is the so-called stimulus bills being used by the current
administration to try to stop the long term bear market. The current rally from
March '09 is running out of steam. The key players are running out of ammo.
The world bear is about to reemerge from his cave; my guess is within the
next 90 days. There is almost no protection against it for the developed and
even the developing countries. Deleveraging is taking place. It is unstoppable.

The laws being enacted in all the countries that have been affected
might protect what happened previously, but will not protect against the next
catastrophe - whatever form that might take. There will be another. That is
the basic mental cycle of humans - to forget and repeat past mistakes as they
are doing now.

There was a major economic recession in 1921 that the president then
decided to let play out naturally with no government intercession. Eighteen
months later it was over.

Politicians look only as far ahead as the next election. They think that
by doing something, anything, it will help them become reelected. They do
not look out for the best interest of their country. Greed gives way to common
sense and usually makes things worse.

The investor for the next few years should have only one goal –
protection of capital and assets. Gold coins, easily hidden and transportable,
are one such asset. Owning a farm, even a small one that can generate
income is another. I believe even healthcare will be so regulated as not to
be profitable. Maybe a small home business such as a bakery might work.
This sounds very dour, but I see not light on the horizon at this time, only
storm clouds of taxation and regulation.

It is time to tighten your belt and take a long hard look into the future.
Take off those rose colored glasses and become a realist.

source newsletter

Posted by Mr Thx Tuesday, January 5, 2010


Post a Comment

Related Posts Plugin for WordPress, Blogger...

Sekapur Sirih Seulas Pinang

My photo
Alor Gajah, Melaka, Malaysia
Sharing is caring. This blog is about sharing information that available in web space. The information is related to Finance, Business & Trading.

Enter your email address:

Delivered by FeedBurner