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Thomas H. Kee Jr., is President and CEO of Stock Traders Daily. The Stock of the Week Strategy offered by Stock Traders Daily may be the best performing strategy on the market since December, 2007 (before the credit crisis), and "The Investment Rate" is arguably the best measure of the... More
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  • Business flight - A global assessment 0 comments
    Jul 7, 2010 5:48 AM | about stocks: TBT, SKF, TWM
    Although I believe TBT will eventually work, we cannot fight the trend.  We stopped out of TBT.  We are now in SKF, TWM, with defined targets and risk controls.  We are also considering additional short - side ETFs.  Login to the members area for live updates if you desire. 

    I am noticing a recurring theme around the world. This is subtle, yet
    right to the point about the global economy. Canada is an excellent
    place to start, and a good example. Toronto has been bustling. There
    are bidding wars for real estate, and the economy seems to be
    flourishing. However, after a 45 minute drive down the 403 another
    economic environment exists. You cannot sell a home in Ancaster. The
    same is true for England. London is bustling, almost like nothing was
    wrong, but a few miles away the real truth is more evident. Again,
    Athens was similar, but the pain was clearer on the faces of the public

    Still, I have found this theme to be telling. An investment banker from
    Barclays told me that the reason London was doing well is because every
    billionaire in the world wants a flat in London. I look at a different
    way. Business people realize that the economy may indeed recover in the
    big cities, but the rural areas are a completely different story. In
    fact, price wars are popping up in rural areas, and that brings down
    margins. This is true, it seems, everywhere but the big cities. People
    still have jobs in the big cities, they have money to spend, but
    everywhere else is different. Outside of the cities, people are
    struggling, unemployment is high, and everyone is budgeting.

    With that observation, I am beginning to formulate opinion. The
    economies of the world are in a stage in which businessmen are
    repositioning to where the money is. More of them are moving to the big
    cities, and that is causing a noticeable growth in cities like Toronto.
    They hope to find business there, and make a good living again, because
    they cannot afford the same lifestyle outside of the city right now. To
    me, that is a material shift in lifestyles. To me, that is proof of
    just how bad the real economy may actually be.

    When have you known a person who has made a life outside of a city elect
    to move to the big city again? Aside from younger generations, most
    adults who live outside of big cities do it because they prefer the more
    peaceful environments. The decisions to move to a big city is not easy,
    it reminds me of another time in history, a tough time. Do you have any
    idea what that is?

    Good Trading.


    Disclosure: skf, twm, qid have been recommended. Author has not conflicts to report.

    Disclosure: no conflicts to report.
    Themes: economy, europe, risk Stocks: TBT, SKF, TWM
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