Hi Bambs,
Actually I made some serious $$ longing mainly gold stocks for the last 5 months. Thanks for your recommendations.
I think that the bull market in gold will last longer than most people want to admit. Take a look at the market cap, percentage of investors who own gold stocks, the tremendous negative spins banks, CNBC (media), and the Fed put on gold (they are scared to death, aren't they?), and use that as a contrarian indicator, it seems that this gold bull market run has its leg. Add to the fact of unavoidable crash of $, domestic terrorism (it's a matter of when not whether it will happen), global tension, massive creative accounting tricks (I was accused of witch hunting months ago when I suggested that Enron case is not unique!), dry growth, it just does not look good for equity market. The Fed is done and is trapped in a catch 22 situation. I hope that more people are beginning to realize the stupidity of not fight against the Fed. They are bound to lose more money.
Just want to add three observations to the discussion;
1) Housing market. I have talked to several brokers and they told me 1-2 years ago, there were lots of people downpaying 30-50% for their houses. Now the percentage of 0% down payment buyers are skyrocketing.
2) Productivity. In silicon valley and Boston area, we are observing a tremendous amount of people willing to work for free to remain on H1 visa status. And in Forster city, at least 15 companies I know ask employees to work 6 days a week while getting paid for 40 hours/week. How much should that boost productivity?
3) Poll. I read a poll last week. It indicated that 90% of the investors are looking forward to a 19% yearly return from the stock market in the next twenty years. They are not worried about retirement at all. Based on such bullish (bullshit) outlook, I think the equity market and investors as a whole are bound to get a nasty surprise down the road.
larry! |
