AndrewBaker

Friday Outlook: Commodities, Global Markets

The rolling over of banks and financials is infuriatingly slow, but rolling over they are: I am waiting for the big drop, but other parties are doing their best to hold these up, and they will probably succeed for a whiles longer. This means, IMHO, that that big drop will be even harsher than it need be; giving the bears a nice return for going short at the appropriate time. And that is the problem: when is that?

Wall Street: Dumb as It Ever Was

Investment is nearly all about predicting the future: only psychological aspects have as much an effect as unbiased numbers, which is one good reason why it's so hard to get it right even as much as half the time.

Nearly all, if not all, of us have a belief about the direction of a market or security, and even if we think we trade unemotionally on numbers or other criteria, our selection process is derived through human thoughts and feelings. Trading blindly on a system can lose money through overtrading or undertrading as well as getting it right or wrong, and backing hunches is not much different.

In other words, there is no golden panacea or holy grail of investment. The most we can do is to beat the average, and by definition, many of us will have average performance. This is an art, not a science, and you've got to love doing it yourself to keep doing it. I do, and I know that if I had left it to others over the years I may have done better: but I would not have had nearly as much enjoyment and pleasure as I have had and continue to have from handling my own investments. Whatever happens and whatever the outcome, I am the master of my own destiny. And that is worth a lot.

America's Overheated Printing Presses and Huge Debts Helping Drive Gold Higher

Yes, gold is headed higher, but there's a correction due; so I sold out this week, and will wait it out until the correction has appeared to bottom. I was in leveraged before, but my next buy will be unleveraged as the swings in price are likely to increase, which hurts a leveraged longer term position.

Wall Street Breakfast: Must-Know News

Those who can, do; those who can't, teach; and those who can't teach become politicians and grease the palms of those that live off those that can, and in return receive contributions towards election expenses and endorsements of their ability, enabling them - they hope - to stay on the political gravy train for a very long ride.

Cynical? Remember the cynics believed in virtue and shunned materialism, which is IMHO, a better philosophy and lifestyle than our glorious leaders of today demonstrate.

Brits More Critical About 'Quantitative Easing' than Americans

QE is a big con trick. The eventual result - not apparent until the government that initiated it has long gone - will be high inflation which will destroy the value of our savings, investments, pensions, and, for those lucky enough to own one, our home (which won't be too bad as long as we continue to live in it, but will be if we want to raise cash on it).

Those responsible for QE and in those cahoots will ensure that they are protected by using various means, including selling their stocks on to us at way over value prices, taking inordinate pay rises through salary, bonus, pension contributions and other manipulations, and holding their own assets in forms where inflation proofing is the expectation.

This is one reason why stocks will fall in price soon and commodities will increase. And why most steeples will be much poorer for a very long time to come.

Are We Becoming a Nation of Renters? Investing for the New Housing Dynamic

Renting is a good option for many. Pouring cash into a home and looking at it as an investment is both contradictory in that one lives in one's home and therefore it is not available to "spend" as are investment funds, and also dangerous in that one is putting too much into one quite illiquid asset thus reducing diversification and becoming dependent on the vagaries of one non-predictable market should a sale be required to raise funds. And this situation often occurs in a period of economic problems which may well mean that the value available is less than anticipated.

Agreed, having cash on deposit doesn't pay much right now, but not much is still better than a reducing value. Corporate bonds and convertibles can provide a better income return for paying rent, and a foray back into the housing ownership market deferred, if ownership is wanted in the future.

Other countries (eg: UK) have schemes where capital can be drawn down from the equity in a home and interest rolled up until death and with a no negative equity guarantee (meaning the estate cannot be liable for interest greater than the realized sale value). These schemes though are not so popular as people see it as giving their home away to the mortgage company and denying an inheritance to their loved ones. So, why not sell, invest the proceeds and rent?

The bottom line is that home ownership is not necessarily the best thing, especially in retirement when funds to enjoy life are wanted.

Wall Street Breakfast: Must-Know News

Yes, the consumer is going bankrupt, unable to afford his mortgage and struggling to find a job, whilst the fat cats on Wall Street and in the financial and banking sector pay themselves ever increasing amounts for providing the conditions that enable them to reap big benefits whilst everyone else pays the price.

It's long past time for society to realize that happiness is not dollar shaped, and that all people matter, not just the rich and powerful: when politicians and others with influence actually work on this premise, then perhaps we may get a capitalist society that also cares.

India Sends Gold ETFs to Record Highs

I sold my leveraged gold position when the price had moved back up, as I see price volatility going forward that would cause leverage to reduce the gains available. I'm going back in on a fallback which I expect will occur before too long, and will go back unleveraged, and with a tight stop initially, and a lower trailing stop once a profit has been established. That should give me a good return whilst also protecting against being whipsawed out by short-term volatility.

Wall Street Breakfast: Must-Know News

Buffett buying a railroad is good sense for anyone with a long term investment horizon such as his. Infrastructure is needed even in the deepest recession: roads, railroads, ports and airports, ships, hospitals, schools, bridges and similar constructions must be built and maintained in order for any economy to sustain yet alone thrive. Some of my own investment is in global infrastructure, and what is not dollar denominated has a good chance to add value through the exchange rate.

Wall Street Breakfast: Must-Know News

I agree, with one slight alteration: it's like handing the gun to GS and inviting them to shoot us in the foot. Times like these shine a light on the great and greedy, and this one is flashing red!


On Nov 04 08:25 AM doubleguns wrote:

> Why would the govt sell tax credits that they should just let expire.
> The tax payers OWN fannie so selling 3B of tax credits for anything
> less than 3b is just shooting our selves in the foot.
>
> The hell with the bidding. They cost 3 billion, bottom line you thieves.

Has the Market Already Hit Its High for the Year?

Yes, it's not sensible to ignore the political influence, biased and unhelpful though it is, and concentrating on specific stocks is a good idea, though even the best fall in a downturn. So, follow the trend appears to me the best way right now, even if it goes against what one believes is the "right" direction. And having tight stops is so important in doing this. (Even your good stocks can be bought back cheaper after they've triggered a stop-loss.)

Wall Street Breakfast: Must-Know News

Pensions: just another way for the CEO and other ranking employees to overpay themselves whilst their company's profits dive and the inflated stock price falls. That and over-generous salaries and bonuses are some of the ways that this elite have contributed to the current financial crisis, that the rest of us will be paying for for many years to come.

Wall Street Breakfast: Must-Know News

At long last and not before time, reality is starting to creep into the pricing of bank and financial stocks. They are way overpriced, and many will now stop crowing as they see the illusory profits they thought they had made recently, fade away.

Short financial ETF are the place to be, and for those racier investors amongst us, FAZ is looking good. It needs to be respected, but big profits can reward an investor quickly, and at this time it's worth a look. It looks to have bottomed and started the climb up recently, and for a short term and day trader offers good returns potential. Plus the RSI is looking good too.

Don't want so much leverage as three times? Then SKF at 2x is there, and if no leverage is wanted, then SEF will assist.

Bank of America, Citigroup, JP Morgan and Wells Fargo Stocking Up on Liquidity

Banks should be split apart to separate the basic banking of deposits, loans and mortgages from the gambling side of derivatives and other trading strategies. This would mean that the "too-big-to-fail" aspect would apply only to the basic utility type banking, and the racier stuff can be done with private money, letting such a bank fail due to losses if that's the way it pans out. That way, taxes and public money are not at risk to support activities that should fund themselves from private sources of finance.

Winning Commodity ETFs for a Falling U.S. Dollar

With the stock markets now at the point of a big drop, IMHO, commodity investing comes even more to the fore. And in doing this, one can hedge against dollar depreciation too. Good article, and useful information.