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Hot tip: Buy Lumber

|Includes: ProShares UltraShort S&P 500 ETF (SDS)

Dear Fellow Investor,


What’s to say when the market gives us a 3 digit boost - - -

How high will it go?

What should I buy?


In answer to that last question let me recommend any company making poles, especially the ten-foot variety.


These will be needed by the many astute investors who have a myriad of sectors they want to stay away from, like

  • banks with their “legacy assets” (does this really increase their balance sheet value?);
  • commercial real estate, problems not yet fully disclosed ;
  • auto firms  and their supply chain, problems disclosed, red ink coming, pole companies will soon be offering ten-foot stilts;
  • long-term paper, especially if it is stamped US Treasury.


The list could go on and on, but by now you get the drift.  This is just a short rally in a bear market.  Anyone playing it today should realize there is an invisible hand at the table.  Perhaps under the table might be more accurate, like the proverbial button that controls the roulette wheel.


I have previously mentioned the silent PPT, Plunge Protection Team, which has the authority to influence the market with limitless funds provided by the government, and that means ultimately by us.  So with them at the table, you had better know how long they intend to stay and play.   It is doubtful they want to boost or prop up the market daily.  But in all probability they do have some goal in mind for the support level they deem necessary.


So the best we can expect is to see increasing volatility, thrilling rides like today, and then that drop into reality after the euphoria disappears.  Nimble investors  will use these occasions to pad their capital accounts, and add anchors to windward like SDS.  Astute traders will have bought puts, and will be looking for low-priced, high beta stocks to ride on the next ascent of the roller-coaster.


Just remember, nobody ever promised us true market transparency.