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Mark Gomes
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With over 20 years of professional experience, Mark Gomes is among the world's most experienced technology stock analysts. During his time as a contributor to Seeking Alpha, over 50% of his official picks were either acquired or tripled in value. Currently, Mr. Gomes is the CEO of Pipeline Data,... More
My company:
PTT Research & Pipeline Data, LLC
My blog:
Poised To Triple
My book:
Faster Than Forty
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  • Instablog for June 28, 2010

    An important secret to getting richer is NOT getting poorer. In other words, protecting your money during times when the stock market is overvalued makes a BIG difference.

    For example, let's say you had $100,000 invested in the NASDAQ on January 1, 2000. If you just left it there, you would have less than $57,000 left, as of this morning.

    However, if you took your money out of the market for just HALF of the 2000-2002 drop and half of the 2007-2009 decline, you would have over $250,000 today -- over 4x more than people from the example above...and that's if you simply stuffed your cash under a mattress during those drops. If instead, you shorted stocks during those times, you would have $1,000,000.

    It's not as hard as you might think. All you have to do is see the writing on the wall and act accordingly. Looking at the two market crashes referenced above, both were precipitated by asset bubbles (Internet stocks in 2000 and housing in 2007).

    The formula is simple. When money flows like water, people party like it's 1999...and the bigger the party, the bigger the hangover.

    Why do you think the "Roaring 20s" was immediately followed by the "Great Depression"?

    Think about it.

    With that, here are a couple of sobering, but critical articles to read.

    http://seekingalpha.com/article/212123-the-third-depression?source=article_sb_picks

    http://seekingalpha.com/article/212090-what-happens-when-the-monthly-jobs-report-goes-negative?source=yahoo

    My most immediate concern is that unemployment benefit extensions appear to be coming to an end. This is troubling news for nearly 10 million Americans, who are currently receiving unemployment insurance in some form. It is also troubling news for the rest of us. If 10 million people suddenly have less money, the rest of the country will suffer.

    This comes at a time when census work is coming to an end (if you've been hounded by census workers, you're probably thinking "good!" -- however, the end of the census means the end of work for over 1 million people). In addition, home-buyer incentives have expired, the impact of stimulus money is starting to wane, and Europe is wrestling with a debt crisis.

    With all of these factors in play The government can help to avoid a double-dip recession by lowering interest rates or providing more stimulus. However, interest rates are essentially zero already. Meanwhile, stimulus has become a dirty word. With elections around the corner, additional stimulus may have to wait until next year.

    By then we could be too close to the cliff to slam on the brakes.

    As a result, I am back to increasing my short positions. I am also reducing the NUMBER of stocks I own, but owning more of the stocks I like best. In particular, I just bought more shares of OCNW. I think that's a good move at its current price of $6. Their business will be driven be stimulus money for the next 2-years, so a double-dip recession will hurt the company much less than most. In fact, I expect its revenues to grow nicely regardless of what happens to the economy.

    Cheers,

    G.

    Jun 28 2:08 PM | Link | Comment!
  • Follow-up re:Gold
    I fielded many responses to my post regarding gold. To set the record straight, I don't believe that the virtues of gold can or should be debated. It is undeniable that gold is overvalued relative to its commercial and aesthetic utility. It is also undeniable that gold continues to rise in value because people believe in it as a representative of wealth. Yet, these are a couple of the arguments that are used by gold opponents and proponents, respectively, in debates.
     
    There is no arguement. Both sides are correct.
     
    The point that I make is that I refuse to own something that is valuable simply because people accept it as such. If the world get rocked back into the stone age, a can of corn could quite reasonably be worth more than its weight in gold. In the meantime, if you put a gun to my head, I will tell you that gold prices will probably continue to rise...but that doesn't make it right and that doesn't make me want to own it.
     
    The link below will take you to an article that sums of my view. It's not up for debate. It's just one man's humble opinion.
     
     
    Cheers!
     
    G.
     
    Jun 25 10:39 AM | Link | Comment!
  • Instablog for June 25, 2010
    Hi All,

    As I expected, ORCL posted a strong quarter. The stock is up and outperforming the broader market this morning.
     
    True to my personal strategy, I'm selling the stock. I only owned it in anticipation of good earnings results. That being said, ORCL remains an inexpensive large cap technology stock. If you like investing in such names, feel free to hold on to your shares. As for me, I tend to stick with small value stocks, so I'll be reallocating my ORCL money elsewhere.
     
    By the way, that's a good segue into a quick Q&A session. One of the readers asked if I could post my daily trades so you could all follow and trade along at home. While that sounds like a great idea on paper, it wouldn't work for most of you in practice. Everyone had different investment goals, different-sized portfolios, and differing ability to make moves in the market every day.
     
    My girlfriend is a case in point. I'm older, have a larger portfolio, and care more about preserving what I've built. She's younger, has a small portfolio, doesn't mind taking more risks, but could care less about making trades every day.

    Appropriately, she has chosen a buy-and-hold strategy focused only on my favorite stocks. This keeps her trading costs down and her upside potential high. The main downside is that she isn't as diversified. However, that risk has paid off nicely. She is up 30% this year, versus 10% for me, and -2.4% for the NASDAQ.
     
    Moral of the Story: My picks shouldn't be the be-all/end-all for your financial future. Rather, my picks should serve as LEADS and play a role in your investment strategy that is commensurate with your investment goals...and that is beyond the scope of my writings.
     
    Have a great weekend,
     
    G.
    Jun 25 10:13 AM | Link | Comment!
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