In May, I wrote an article claiming that AMZN was overvalued. It was at that time, 79.79 per share. In the short term, I could not have been more wrong.

We know that share prices of companies are like voting machines in the short term and weighing machines in the long run. The enthusiasm about Amazon today is quite positive and voters are certainly signaling they want to own Amazon, at any price.

After teaching my Value Investing Class the other night, one of my students followed up with a question about a local company: The Hain Celestial Group (HAIN).

She asked whether I thought it was a good time to buy, explaining that she had read a positive story about the company in the local newspaper. I happily responded I'd take a look for her utilizing the methods I taught in the class.

Making short term market predictions is a fool's game, but I have some observations that I think give reason for concern.

There is a chart that I started looking at recently. It's called the NYSE Bullish percentage index. It's the percentage of stocks giving buy signals on point and figure charts. It gets updated daily. You can find it on stockcharts.com with the symbol being $BPNYA.

History may not repeat itself, but it does rhyme. I have been in the camp that this is a bear market rally. That is what I thought we would be getting in March. I'm also in the camp that because of the need to deleverage debt in most of the developed world, we will likely be heading into a global economic depression and perhaps at worse case, a collapse in the banking system.

I took a look at the bear market rally of 1930 and have found many similarities to our current bear market rally. Here is a chart from MSN money of the Dow Jones Industrial Average from November 1929 to October of 1932.

Just like the cover of my book, "Put Your Money to Work," the picture depicts a reluctant "Bear" selling his undervalued shares to the savvy investor. In due time, the savvy investor sells his shares he bought from the "Bear" to the "Bull" after the share price has risen and become overvalued. The whole "buy low, sell high" premise.

We have been enlightened to a rather public person's Real Estate dilemma; Timothy Geithner.

He, along with his wife, bought a NY house in 2004 for $1.602 million. Currently, they owe $1.25 million in 2 mortgages on that house.

Over the weekend, I went to a 19th Century Village Restoration on Long Island showcasing homes and businesses from Long Island during 19th Century. The Village had all the characters in uniform acting as the very people who lived or worked in the homes or businesses back then. The hat maker, working in his little shop with his wood burning stove actually made a good living. He made his hats and would sell them in Manhattan for cash to a wholesaler. He saved his money and bought a 600 acre farm according to the bearded man playing the role of the hat maker. His 600 acre farm was his retirement fund. He could rent it out, mortgage it off for monthly income or hire labor and farm the land for profit. It was good old 19th Century financial planning.

What about today? What are some ideas for passive income to retire on or simply earn an income from? Lets assume you have $250,000 to invest. What can you get from $250,00 today for monthly income?

Business Description

From Amazon's (AMZN) profile on Yahoo Finance:

Amazon.com, Inc. operates as an online retailer in North America and internationally.

Disclosure: I own April Puts and may short BBBY in the future.

Business Description

From its website: American Oriental Bioengineering (AOB) is a leading, fully integrated, pharmaceutical company located in China dedicated to improving health through the development, manufacture and commercialization of a broad range of pharmaceutical and healthcare products. A majority of their current products are offered and derived from Chinese based traditional medicines and are manufactured using plant based materials.

October 9, 2007, marked the day when the Dow Jones reached a peak at 14,198.83. On October 10, 2008, the Dow reached as low as 7,882.51 which is a decline of about 45%. These are tough and humbling times to be an investor or simply someone trying to save for retirement or a down payment on a house.

A 45% decline in the Dow over 1 year does not happen often. When we take a longer term look at investing, we can appreciate that we'll have years when we won't have gains, but at the same time, we'll have years when our gains will be terrific and we'll have years when our gains will be average. But ultimately, the goal of investing is to have gains and not lose them, and that makes years like this tough.

We learned in August that the CPI for July of 2008 was up 5.6% over a year ago. The annual inflation rate for the 3 months prior respectively was 5.02%, 4.18% and 3.94%.

As I write this on September 2nd, 2008, the rates of return you would get for the the 10 Year Treasury Bond is 3.74% making your return - 1.87%.

In my book, Put Your Money To Work - What you Need to Know to Invest in Stocks, I wrote a chapter about the characteristics of a great business. The two main characteristics include having a strong franchise or brand that can allow for years of longevity and sustain pricing power and margins; the second being that the company has a strong management, which can best be judged by how much money is earned on the capital employed or simply earnings as a percentage of assets.

Premier Exhibitions (PRXI) is the company that does the "Bodies" exhibition as well as other exhibitions including "Titanic: The Artifact Exhibition," "The Universe Within;" "Sports Immortals and The Traveling Exhibition;" and "Dialog in the Dark." It has operations in the United States, Canada, Germany, Norway, France, Greece, Japan, Switzerland, Chile, Argentina, China, Mexico, Hungary, South Korea, and England.

In 1999, the total value of residential real estate in America was $10.429 Trillion.  Today, there is total of $10.600 Trillion in home mortgages outstanding. 

Obviously, home values have increased and many new homes have been built since 1999.  What's most striking is the % equity of the overall home values of America has gone from being 57.5% in 1999 to a measly 46.2%.  ($19.7175 Trillion current value of household real estate and $10.600 Trillion in mortgages; see the links above.)

We all know the famous words of Warren Buffett, "The secret to getting rich on Wall Street is to be greedy when others are fearful and fearful when others are greedy." But how can we know others are greedy or fearful?

One way is to look at a Volitility index or otherwise known as the VIX. The VIX is an index that using futures on the S&P 500 to gage the level of volatility that investors expect in the next 30 days.

A reader recently sent me an email asking, "How does one invest in these recessionary times?" A question many are thinking these days.

"Carefully and with sound judgement" is an easy answer to reply, but that doesn't help much. This post will attempt to give one answer to that question.