Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday November 9th):

... A man has rigged up a turkey trap with a trail of corn leading into a big box with a hinged door. The man holds a long piece of twine connected to the door that he can use to pull the door shut once enough turkeys have wandered into the box. However, once he shuts the door, he can’t open it again without going back into the box, which would scare away any turkeys lurking on the outside. One day he had a dozen turkeys in his box. Then one walked out, leaving eleven. ‘I should have pulled the string when there were twelve inside,’ he thought, ‘but maybe if I wait, he will walk back in.’ While he was waiting for his twelfth turkey to return, two more turkeys walked out. ‘I should have been satisfied with the eleven,’ he thought. ‘If just one of them walks back, I will pull the string.’ While he was waiting, three more turkeys walked out. Eventually, he was left empty-handed. His problem was that he couldn’t give up the idea that some of the original turkeys would return.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday November 2nd):

We arrived in San Francisco around noon last Monday. After a quick lunch with friends in Atherton, followed by another short visit with more friends in Los Altos, Cheryl and I pulled up to the hotel De Anza in San Jose (a wonderfully refurbished 1920s hotel with a great Italian restaurant named La Pastaia). After checking in I warped into the Internet only to find my email “box” slammed with questions about Dow Theory. Those questions were kindled by some alleged pundit who appeared on CNBC and declared that a Dow Theory “sell signal” had been rendered. While it is true that there are numerous practitioners of Dow Theory, over the years I have learned that many of them do not interpret the theory the way I was taught.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday October 26th):

Baruch liked gold mines. There is always a market, he pointed out, for their product, and at a satisfactory price. Gold, he insisted, is one of the very few things in the world that approaches the status of a permanent investment. Baruch told the story of a Rothschild who set up a ‘permanent trust’ consisting of five different currencies. By the time Baruch heard about the trust, it had shrunk to one-fifth its original value. ‘But gold doesn’t yield any interest,’ a friend protested after listening to the story. ‘True’, replied Baruch, ‘but consider the fabulous wealth of some of the Indian princes and rajahs. I had dinner with the Maharajah of Kapurthala on one occasion in Vittel, France. Several of us talked afterward about his wealth, and someone said that among the treasures of these Indian moguls were gold coins brought to the East by Alexander the Great, hundreds of years before Christ.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday October 19th):

In Greek mythology Sisyphus was the son of Aeolus, who was the King of Thessaly. Noted for being sly and evil, this cunning knave waylaid travelers and murdered them. After betraying the gods, Hades himself intervened and as punishment required Sisyphus, for all of eternity, to roll a huge stone to the top of a hill only to have it plunge back down just as it was about to reach the crest. According to the dictionary, Sisyphus means “endless and unavailing, as labor or task.” Since mid-September there is little doubt investors have felt the same frustration Sisyphus did as the media trumpeted the D-J Industrial Average’s (DJIA/9995.91) failed assaults on 10,000. Last week, however, Sisyphus succeeded as the senior index legged it past the 10,000 mark for the first time in over a year, causing one Wall Street wag to ask, “Is this a breakout or a fake out?”

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday October 12th):

“The absolute price of a stock is unimportant. It is the direction of price movement which counts.”

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday October 5th):

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday September 28th):

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (Sept. 21st):

“Do you sincerely want to be rich?” What a great question. But to accomplish that goal, to make those “outsized” gains, you need to know one thing – in a bull market don’t lose your entire position! Certainly you can rebalance positions (read: sell partial positions) as the security in question rallies. However, never lose your entire position.

The actual private object of most skilled investment today is to ‘beat the gun.’ As Americans so well express it, to outwit the crowd and to pass the bad, or depreciating halfcrown, to the other. For it is, so to speak, a game of Snap, of Old Maid, of Musical Chairs – a pastime in which he is the victor who plays ‘snap’ neither too soon nor too late, who passes the old maid to his neighbor before the game is over, who secures a chair for himself when the music stops. Or to change the metaphor slightly, professional investment may be likened to those newspaper competitors in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors, as a whole; so that each competitor has to pick not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view. We have reached the third degree where we devote our intelligences to anticipating what the average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.

Bet it surprises you that the aforementioned quote is from John Maynard Keynes’ legendary book “The General Theory of Employment, Interest, and Money,” written back in 1935. Read it a couple of times away from the maddening crowd, and reflect on it, because certain phrases will grab you with their wisdom. Bet you it also brings back memories of last year’s market machinations, and a wish that – if I had only “beat the gun,” or passed the “old maid” in time to avoid the final “snap.”

“Discovery consists of seeing what everybody has seen and thinking what nobody has thought”

. . . Albert von Nagyrapolt, The Science Speculates

“It takes a licking and keeps on ticking” is a phrase lionized by pitchman John Cameron Swayze in the Timex watch commercials of an era gone by. Similarly, the same can be said about the current state of the stock market, as despite the Asian Angst, the overbought observations, the vitriolic violation of the 10-DMAs, and all the other negatives mentioned by the “bears,” we keep chanting “Cautious yes, bearish no.” Consider this: at the March 2009 “lows” the equity markets were at least three, and possibly four, standard deviations below norms.

Remember that a three standard deviation event is something that is supposed to occur once every 750 years, while a four standard deviation event happens every 31,750 years. Accordingly, at the March 2009 “lows” we were aggressively bullish; and, even though over the past two weeks we have been wrong-footedly cautious, we have never given up on our 1050 target for the S&P 500 (SPX/1026.13). Indeed, the nearly six-month rally has left the major market averages only neutrally valued based on historic metrics. Therefore, it is not too much of a stretch to think the “averages” could actually achieve a reading of one, or even two, standard deviations above norms to achieve the “greed factor” so often mentioned in these missives.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (August 17th):

The following graph highlights our proprietary short-term technical indicator displayed with a chart of the Dow Industrials. You can see that it has done a very good job of identifying the March and July lows and turned bearish in June as the market was attempting a breakout through 950. It is now at a severe negative reading and this is why I am in a maximum defensive position. With the frenzied pace of buying that we've seen in the markets we could see an air pocket develop over the next several weeks. Caution and patience are recommended at this time.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (August 10th):

...[F]or months we have opined that if a Dow Theory “Buy Signal” was eventually registered that so much energy would have been expended in achieving it the major market averages would likely be a “sell” on the event. And here we are, a Dow Theory “Buy Signal” has finally been registered and by our pencil so much energy has indeed been used to accomplish it we think the equity markets are a short-term “sell.”

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (August 3rd):

Observers of our work know that we have always emphasized the importance of dividends with regards to their impact on total portfolio returns. Manifestly, since 1926 dividends have accounted for more than 40% of the S&P 500’s annual return. Further, dividend-paying stocks, if those dividends are secure, tend to become more valuable as their share price declines because the dividend yield increases. Therefore, when we can find a “yield play” to take advantage of an intriguing investment, it always piques our interest.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (July 27th):

Last Friday, a Capitol Hill insider sent me the nearby schematic of the proposed Obama healthcare plan. According to her, said schematic is trying to be repressed for obvious reasons. As I sat there, attempting to decipher it, I was reminded of a similar schematic I used in a report titled “Crystal Clear?!” back in 1993. At the time “Hillarycare” was in full regale and equally complex.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (July 20th):

...[T]he stock market didn’t seem to care about such political agendas last week as the S&P 500 (SPX/940.38) tacked on another 7% to close the week around 940, thus negating the widely advertised head-and-shoulders “top formation” in the charts. The Weekly Waltz also left the SPX above its 10/30/50/200-day moving averages and in a position to challenge its June 11th closing high of 944.89. Bettering that level would suggest an attempt to achieve our long-standing target of 1050.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (July 13th):

I spent some time over the weekend reading more thoroughly some of the material I skimmed several months ago and put aside for later study. One such piece was the Forbes 400. While studying it a couple of things leaped out at me. First, staying rich is nearly as difficult as getting rich. Remember the oil tycoons like the Hunt brothers who dominated the list in the early 1980s? Now such folks don’t even make the list. Plainly, it’s one thing to make a fortune and another to keep it. You know what happened to Bunker Hunt and the oil patch people. You also know what happened to many of the late-1980s trophy real estate crowd. New fortunes replace old. New industries surge as others slide. New people top the list as the old drop out. Indeed, it’s one thing to make a fortune and another to keep it!

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (July 6th):

...[T]he equity markets have begun to “feel” like they have lost their hope and security over the past three weeks. To be sure, we have now had a 90% Downside Day (90% of total cumulative points and volume are skewed to the downside) in each of the past three weeks (7/2; 6/22; 6/15). History suggests that multiple 90% Downside Days increase the odds that a downtrend pattern has begun.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (June 29th):

...If the markets have embarked on a new worldwide bull market the “new leaders” are likely to be emerging and frontier markets. That view was reinforced by our friends at the astute GaveKal organization, whose seminar I attended last Thursday. I love the GaveKal folks because they are truly “out of the box” thinkers; and, it is just such thinking that produces net-worth changing ideas.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (June 22nd):

..."While history doesn’t necessarily repeat itself, it does sometimes rhyme.” We think it might just “rhyme” this summer as the equity markets trade sideways as investors contemplate whether the improving economic numbers are ephemeral or for real. Our guess is this won’t be figured out by the markets until the late summer.