The recent run up in stocks looks very ugly. First, gold, oil and copper have been trending upward at the same pace as stocks. What is worse is that this may be an emotional rally as AIG went up $2 today and is trading at $24 per share, how can a company with several TRILLION dollars in liabilities (Currently held by the US Federal Reserve) have a stock price greater than 0? Are their other businesses earning enough to cover the interest payments? What about the other big banks that have liabilities from AIG.
I think this whole rally is entirely inflation based: It is easy for the companies to earn more dollars last year as the dollar is worth less and the government has spun some big lies about the real increases in prices resulting from the Fed-Government previously created inflation.
Sentiment indicators are at significant high levels and its playing out beautify from a elliotwave/cycle view. Banks are a mess and have been for years, but that doesnt mean one can not make money trading.
From my view it is an powerful correction, bear market rally, which was very predictable from the start but now seems to be nearing its end. But the dow and others still have some upside potential, Im placing my bets for a nice big fall again.
Markets are not rational, they are emotional.
Stocks and metals should go down and the dollar is set for a huge rally. Deflation is here to stay.
It’s another to realize “Would I have done better as a buy-and-hold investor in gold or silver?” I suspect the answer is “A buy-and-hold gold investment will outpeform an active stock market trader.”, but it’s impossible to prove.
I don’t know what kind of fantasy world you’re living in where there’s deflation. The Federal government and Federal Reserve are printing money like crazy. Eventually, this will show up as higher prices.
When you consider that the financial system might completely collapse in 20 years, then gold and silver might be the only investment that keeps its value.
I was so disappointed when I realized that the stock market is one big scam. It’s like discovering that Santa Claus doesn’t exist.
One I would never recommend buying and holding for investing in general to most people. The key there is when to buy, most people never buy the bottoms and get in at the top.
The FED is doing alot to stop deflation but hasnt even come near the amount of dollar denominated debt. Just as Japan has been trying to do for a while after the nikkie busted. Many people are screaming runaway inflation but the metals sure have not showed it yet, gold cant break 1000. Hopefully the FED will be gone sometime during this bear market. SIgns are starting to show.
The dollar now buys twice as much property, stock and commodity. Inflation? no the dollar is what people want. Cash is king as it was during the great depression. I am disgusted in fiat money and the fed and our govt but one can profit in numerous ways with good forecasting and money management.
Dont get me wrong hyperinflation is possible in the future and the long term trend of dollar has been down. I do advocate owning hard assets, its real money. Things can get real ugly after 2012-2016 market bottom. Politicians have shown they would try anything…There will be a time when we should be completely out of dollars.
You should have a good opportunity to buy gold at 680 range soon and silver 8.80 range and I would grab the stuff up and hold then. Its good insurance and man nothing beats holding the real thing. But hell I could be wrong, as I am often, but I will admit it and correct my self and go along with the ride.
I never been disappointed in the stock market, its alive and tells us everything. I love watching it unfold in fractal waves and cycles…(drools)
Best of luck to ya and whats this nonsense about santa not existing???
I just finished reading Crash Proof. I think that if you’re an American, you should buy foreign stocks, especially in Asia. When the Chinese peg to the American dollar comes off, businesses selling to Chinese consumers are going to skyrocket, and businesses selling to Americans are going to crash and burn. On top of it, inflation will eat away at any earnings made on US stocks. Even in nominal terms, foreign stocks have a lower price to earnings ratio making them a better buy.
I don’t know what this kid is on about with this Elliott wave nonsense. I think if he actually does invest, he’ll lose alot in the near future.
Wow so you just look at the inflation numbers and you can see how much of the rally is inflation and how much isn’t. I checked and actually there was 10% inflation just yesterday oh yeah that explains AIG’s price perfectly.
Here’s my investment advice. Don’t let your distaste for the Fed affect your analysis. How many times do you think hyperinflations have been predicted in the past? This time, the crack-up boom must be coming!
The initial AIG increase was due to a reverse split, wasn’t it? Is this latest boost “real” (lol)?
I’m not in the US market (hahahaha), but what the heck is happening with it now? It’s crazy. A guy at work I talk to about this stuff thinks all is well and the market is just recovering, he says he’s been making a lot of money lately…
There are plenty of articles completely supporting your view: it’s a stimulus-driven bubble that will very soon (my opinion: by the end of the year) burst, not just in the US (China anyone?).
I’ve advised my brother to get rid of the stock he owns right now (whose behaviour he described as “neurotic”, and he picked “sure things” like oil companies and big pharma) and i’ve noticed that during the last week the price of Mexican gold pesos and Krugerrands (the mainstays of my gold reserves) increased dramatically, confirming we are not the only ones expecting the burst.
Here’s my advice. Don’t think you are smarter than the institutional investors, insiders and market manipulators. The minute you think you are smarter than the market, is when your confirmation bias will bring you down.
Read some Nassim Taleb and get real. When laymen come on Mises.org and start talking about market bottoms in 2012~2016, that’s when you know they are either fools or having you on. No one who makes money, and knows what they are doing, so cavalierly tosses around information, particularly about the things they do not know.
What I’d like to know is what we tell people who now think they are right (again) even though they were utterly wrong before and would have never predicted anything close to a 50% crash. Everything is back to normal and starting to recover, they seem to think. I think this sounds a little like how you define insanity…