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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (4906)	1/13/2004 10:02:18 AM
From: mishedlo	Respond to of 110194

From the daily-rec "NO ONE is making long-term investments," writes Hirschel Abelson after surveying the dozens of companies in which his fund invests. Neither in equipment, nor in people. Of course, this is no way to build an economy or make people rich. In the modern, globalized economy, if an American is to continue earning 10 times as much as a Indian, he has to produce 10 times as much. Which means, the society in which he lives has to invest massive amounts of money in new equipment and training. Instead, corporate America seems to care only about cutting expenses to make the next quarter's numbers...

To: russwinter who wrote (4906)	1/13/2004 10:07:57 AM
From: mishedlo	Respond to of 110194

Laugh of the day. From Steve on my board I was attempting to pick up some clutter at home over the weekend, found an issue of Fortune from 1 year ago. One of the front page stories was "Why the price of oil will fall" Steve....didn't throw the mag away, looking forward to some humorous reading

To: russwinter who wrote (4906)	1/13/2004 10:13:57 AM
From: mishedlo	Read Replies (2) \| Respond to of 110194

From Plunger on my board This dumping Dollar is really causing massive imported inflation Import price index up YoY +1.9% OUCH!!! MoM (ex-petroleum) +0.1% WAAAAHH!! With what was it .. 9% productivity growth ... this means what .. 7% wage DEflation. Some think Treasuries are a SELL????? OK OK I'm picking and choosing my stats but these numbers have a story to tell about the IN/DEflation debate. Plunger.

To: russwinter who wrote (4906)	1/13/2004 1:11:21 PM
From: austrieconomist	Respond to of 110194

Russ, OK, since you have outed me to the public side, I'll rehash my investment philosophy. It is conservative in orientation, and acknowledges that I do not have the time to do independent heavy analysis although I have the arrogance to believe that I could do it. I am looking for a time frame of 1-3 years. I have sifted the investment advisor spectrum for over 35 years, have worked as a broker, have an M.B.A., although make my living as a lawyer. I took my handle from my upbringing and my days at the Foundation for Economic Education, where I interacted from time to time with Ludwig von Mises, Percy Graves (the first to write Understanding the Dollar Crisis), George Roche, Gary North but mostly with Leonard Read. I understand the issues in the inflation/deflation debate and believe that investments should be based upon positions that can be successful within those tensions. Gold is one, perhaps the best subset of the class of investments that is anything but the dollar. Back to the U.S. markets. I don't believe there is any credible support for the position that stocks are fairly valued. On virtually all historical measures including P/E, price to book, dividend yield, Tobin's Q (roughly, price to replacement cost) stocks are grossly overvalued. Thus they are getting more overvalued through time. They are priced to deliver poor returns over time -- read Hussman as a convenient free source of information on this concept, which is the bottom line for the reason to own stocks (that is,when they are priced to deliver good returns). That does not mean it is prudent to short the market currently (or at time in the past year through the present). Stocks move in cycles. The old phrase was "Don't fight the Fed". It has worked recently but was of little help and much harm to investors in 2001 and most of 2002. The best timing strategy is to understand when investors, by their actions, "are willing to take on risk" and buy stocks, regardless of price, and either (1) go along for the ride or (2) stand aside. Again, Hussman describes it best and has determined with his indicators whether investors are willing to take speculative risk. At the moment they are and stocks have "speculative merit" in Hussman terminology. In Russell terms, the markets are inhaling after a long term of exhaling. My view in the markets is to respect and follow in derivative fashion those who have established (publicly) long and respected track records: I have identified a non-exclusive list of six that I follow -- Hussman, James Stack of InvesTech Research, Ned Davis Research, Lowry's Report, Dan Sullivan of The Chartist, and Richard Russell. All six recognize that the markets are overvalued; however, all six also recognize (and have since, April, 2003 give or take a month for all of them, except Stack who turned prematurely positive too early in 2002)that investors are in the mood to bid up stocks. Until a few of them give a "sell" signal I will have no interest in sniffing the short side. This may cause me to miss a few weeks or months of the down move in U.S. stocks that is surely coming, but I believe it will keep me out of unsuccessful investment positions dependent upon downward U.S. stock price action, as it has since April, 2003. I'm not greedy and I am cautious. I am happy to join the short side party after it has begun, rather than try to anticipate it.