InvestBaboo

Why Your Portfolio Could See Another 12% in 2009

The markets roared today and this rally appears unstoppable. The Slumdog Millionaire portfolio scored an astounding ONE DAY GAIN OF 12%. This is on top of the 6% plus gain it achieved last week which was a relatively flat week for the markets. The portfolio is listed in my InstaBlog.

Please note that the mutual funds are hungry now and they will come looking for those unfairly beaten down names which were once mega stocks but were reduced to slumdogs by the crash of 2008. If even a small section of equities in this portfolio see their glory day highs you stand to make an incredible killing. Some slumdogs have nearly doubled since I added them to the portfolio but I believe they have a long way to go. They have the power to triple or even quadruple within the next year if my theory of a reverse black swan event holds true. So far this theory is unfolding just the way I envisioned it!

Why Your Portfolio Could See Another 12% in 2009

Digging deep here are we not? :-) Let us see where this week's action puts us.

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Baboo: did you happen to notice that the uptick on Friday which put the weekly close above the resistance line? It only occurred in the last 5 minutes, and on miniscule volume. A pretty shaky foundation, as "great signs" go. I'd proceed with caution.


On May 03 02:41 PM InvestBaboo wrote:

> By the way to all chartists -- S&P registered a Buy signal on
> the weekly charts for the first time in this bull rally just this
> past week. NASDAQ celebrated its 6th weekly confirmation. Great signs
> that portend a continuing bull run for the markets. Where it stops
> I don't know but this author makes a credible case that it is 975
> that we need to be worried about and he is probably right

Why Your Portfolio Could See Another 12% in 2009

By the way to all chartists -- S&P registered a Buy signal on the weekly charts for the first time in this bull rally just this past week. NASDAQ celebrated its 6th weekly confirmation. Great signs that portend a continuing bull run for the markets. Where it stops I don't know but this author makes a credible case that it is 975 that we need to be worried about and he is probably right.

Why Your Portfolio Could See Another 12% in 2009

The author is making a bull case for the market run-up from current levels to the 200 DMA which is 975. This is consistent with my technical analysis. As it gets closer to 975 he seems to say that there is a danger of wild swings in the market as many technical traders will buy/sell betting for or against the 975 resistance. To me this implies a buy and hold strategy until you reach the neighborhood of 975 and then be very very very very careful with your stop losses as a real possibility exists for the market to give up some gains and remain stuck in a trading range. This long term prognosis is only as good as how fast I typed these words and a more solid outlook can only be had as we get closer to 975 and the various economic parameters that wait to greet us at that point. Stay tuned.

Barron's Banks on $100 Oil

On a per capita basis an American consumes 52 barrels of oil a year -- the highest in the world. Indians consume 1 barrel per person per year and China 2 barrels per person per year.

If the U.S. consumer on the average cuts his consumption by 2% that is equal to 1 (appx) barrel of oil per person per year. That frees up about 250 million barrels of oil per year.

It is the math above that pundits forecast when talking about China and India's demand increase. When the U.S. consumer cuts his consumption the Saudis will choke in their sleep. $100/barrel oil is not optimistic talk -- it is a reality that will happen.