Bullish Information

[DemonD]

Re: Bullish Information

demon d, a more likely parallel is the period from the late '60s to 1982, when the dow went from 1000 all the way to 1000 [again] but with a very exciting ride along the way, and lost about 75% to inflation although nominally ending that stretch where it began. not a time for buy and hold.

JK, agreed. My argument still stands, however. If you had bought MO in 1960, let's see here... well, I can't find stock price from 1960, but from 1970 to 1982, price appreciation was about 650%... and that's before dividends, which I believe were in the 4-7% range for most of the 70's. You would have absolutely obliterated "the market" had you held MO throughout the 70's.

I mean, we can argue all this till we are blue in the face. Assets rise and fall in cycles. Gold price didn't change for 25 years either... does that make gold a bad investment? If gold is at $600 ten years from now... does that mean that it's bad to own gold for let's say the next 3-5 years? The Dow went 6 years between peaks... yet when I initiated a position in May of 2003, was that a bad bet? The markets had gone down, and where coming back, fundamentals were coming back online....

The point is to find the assets that you will win with. For my money's worth, the best bet is always with the house. Who is "the house"? Corporate America. Quite literally too, because you can buy things like Las Vegas Sands. You do your due diligence, and you go with what you have most confidence in.

On one more bullish note: DJIA up 25 yesterday, and the nasdaq continued to rally up 15.

For a non-bullish note (but not overly bearish), morningstar came out with their fair value estimates of the nasdaq, S&P 500, and DJ, and basically found the DJ slightly undervalued, the other 2 slightly overvalued, but all were basically pretty close to fair market value. That is where my opinion lies right at the moment - the US stock market is at a fair value at this point in time.

[Jim Nickerson]

Re: Bullish Information Maund reversal on HUI and WTIC

Below is a note from1/7/06 that I posted in the Bearish thread. note #63, along with an edit to it I made this evening.

http://www.safehaven.com/article-6660.htm

Clive Maund 1/7/07 "Bottom Fishers Beware"

This guy I think is generally worth reading. This article covers gold, silver, HUI, copper, oil and US Bonar.

If one is invested in any of these items, I think this article is important.
----------------------------------------------------------------------------------------

edit: 1/10/07 11PM

Tonight on safehaven.com in a note dated tomorrow 1/11/07, Maund appears to me to be making an "emergency" change in direction of the bearishness noted above in this post 4 days ago. http://www.safehaven.com/article-6681.htm In this link, he notes, "...evidence has begun to appear that a possibly dramatic reversal to the upside may be close at hand."

He references the $HUI and $WTIC in his comments, whereas 4 days ago he was mentioned gold, silver, HUI, copper, WTIC, and the bonar.

In all of his charts from 1/7/06 the indicators were RSI's and MACD's. In this perhaps "emergecy" note of 1/11 he has switched to variations of stochastic oscillators--with which I personally have no familiarty. Whatever he is seeing in these indicators in addition to his "all-important MSI" indicator (Maund Subscriber Index), he suggests the "possibly dramatic reversal to the upside" may be near. When I make my own assessment of the charts he used on 1/7/07 using the RSI and MACDs, I think they all still look negative.

Interesting too, in his chart on WTIC dated 10-Jan-2007, it notes the closing oil price was down .09 today, when in fact it was down 1.62. I have to assume his interpretation based on the erroneous change in oil he shows for today would be different as would the STOchastic indicators had he used the correct closing price for WTIC today. What happens at stockcharts.com for reasons beyond my understanding is they have some difficulty getting the final $WTIC data into their database until perhaps 9-10PM each day.

So I do not know what to make of Maund's issuing a reveral 4 days after he was rather bearish, especially when part of his chart arguments was in error.

[jk]

Re: Bullish Information

demon d, a more likely parallel is the period from the late '60s to 1982, when the dow went from 1000 all the way to 1000 [again] but with a very exciting ride along the way, and lost about 75% to inflation although nominally ending that stretch where it began. not a time for buy and hold.

[DemonD]

Re: Bullish Information

DemonD, I see and appreciate your point of age and time horizon. They are pertinent. I can't quote you, and will not search out the facts, but the US equity markets have had long periods in which they have returned little money--like 20 years after some point the DJI gets back to where it once was. Perhaps that will never happen again (just as well I guess in real terms we might be in the 7th of ?X years before the DJI might again reach its real high) but were it to again go a decade or so without real gains, I certainly would not want to be in a buy and hold strategy in stocks.

One perhaps should not lose sight of how extended downturns can be.

Jim, what you are referencing is the stock market crash of 1929. I would consider this to be a worst-case scenario for the world at-large.... but not for me. Since I'm at a relative beginning of my earnings power, a 1929-type event would more than likely help me in the long run due to the fact I will continue to buy more equities. What happened after 1929 is that it took 25 years for the market to return to it's 1929 level.

http://www.fool.com/investing/divide...ar-market.aspx

"On Sept. 3, 1929, the Dow Jones Industrial Average hit 381 -- and did not reach that level again until November 1954. That's an incredible rough patch that pained investors for a full 25 years. As I pointed out in my previous article, Siegel explained the surprising truth that the average stockholder who reinvested dividends actually showed a positive return of more than 6% per year during that 25-year period, easily beating the performance of bonds and short-term treasuries."

So if you held stocks before the market crash, had speculative plays similar to negative earning tech companies and then sold them for huge losses, yes, you would have been bloodied and jumping out of a window. But that, to me, is overly simplistic. There is a reason there are things such as dollar-cost averaging, compounding interest, dividend reinvestment programs. Over the long haul, earnings and dividends are king. This is why one of my core holdings is the vanguard value index fund, which owns stocks that are mostly blue chip, dividend paying stocks that have been around and paying dividends for a long time-- some well before 1929.

And I mean, look, I'll admit it... I love stocks. I love the stock market. I'll admit, I'm biased. But stocks just make more sense to me intrinsically more than any other type of investment. To "go a decade or so without real gains" on the DJIA does not mean that I won't have real gains in my stock and mutual fund portfolios. LTBH is a wonderful investment strategy if you have the right equities, buy low, undervalued companies that pay good dividends and are cash flowing positive. Long term returns over 50 years for the top 10 S&P stocks are well over 13%, and I happen to own the top returner of that bunch, which is Altria (formerly philip morris). "According to Wharton finance professor Jeremy Siegel's research, Altria (NYSE: MO) was the best-performing stock of the S&P 500 from 1957 to 2003. It returned an incredible 19.8% per year during those 46 years." http://www.fool.com/investing/small-...ion-stock.aspx

Also, you can use stocks to fit any investing thesis you wish, whether is commodities, finance, housing/REITs, international, alternative energy, etc. Most international mutual funds outgained gold for 2006, as did REIT funds.

Your words of wisdom are duly noted though. I think the best thing I did in 2006, btw, was not buying real estate while continuing to add copious amounts of money to my stock positions.

[Jim Nickerson]

Re: Bullish Information

As far as your cash/other investment position, being quite young I have an extremely high risk tolerance. My cash position is about as close to zero as you can get (I have a couple hundred bucks saved up for a real emergency, but that's about it). Some of my mutual funds I plan on holding for anywhere from 5-30 more years, and even if we have a 1929-type event in the next 5 years, it is likely this will help my eventual long-term financial picture more than hurt it.

DemonD, I see and appreciate your point of age and time horizon. They are pertinent. I can't quote you, and will not search out the facts, but the US equity markets have had long periods in which they have returned little money--like 20 years after some point the DJI gets back to where it once was. Perhaps that will never happen again (just as well I guess in real terms we might be in the 7th of ?X years before the DJI might again reach its real high) but were it to again go a decade or so without real gains, I certainly would not want to be in a buy and hold strategy in stocks.

One perhaps should not lose sight of how extended downturns can be.

[DemonD]

Re: Bullish Information

Not intending to put forth a guideline for anyone, I am setting on 75% cash right now, and I am more worried about the 25% that isn't in cash. Richard Russell, who is not omniscient, today wrote CRB chart "Not a pretty picture--in fact, it's a deflationary picture." Copper, "It's a time-honored barometer of the world economy. The trend here is clear enough. I call this a "waterfall formation." And it is not inflationary."

The possibility of deflation worries me, and that it is so discounted as having any likelihood of occurring also worries me. PM's, commodities have taken a real hit in the last 10 days or so, and I was fortunate, so far, to take some gains and losses and have gotten out, thus having avoided some significant losses in the last 2-3 weeks in how I was positioned. There are some people on this board who are many times smarter than I about markets, who seemingly to me in their own minds have all the bases covered--which is good. I wish I could do it and be comfortable, but I am not sophisticated as to be able to accomplish that.

Jim, Tet mentioned on another post that the largest consumer of copper is China. It looks like industrial metals (copper, aluminum, tin, lead, iron, nickel, etc.) will have a price based on demand from China.

As far as your cash/other investment position, being quite young I have an extremely high risk tolerance. My cash position is about as close to zero as you can get (I have a couple hundred bucks saved up for a real emergency, but that's about it). Some of my mutual funds I plan on holding for anywhere from 5-30 more years, and even if we have a 1929-type event in the next 5 years, it is likely this will help my eventual long-term financial picture more than hurt it.

Here is what I plan for this year: what I'm looking at is an exit point for one stock that I own, and now in holding some commodity-based stocks, I'm fairly positioned in terms of having my portfolio hedged against a runup in gold or oil.

The reason I can't see exiting the market right now though is the immense liquidity out there. And, based upon some of my own valuations, I have found a couple of compelling stock positions, especially with the recent pullback in commodity prices. Also, I own a very, very highly speculative biotech stock. My investment style you could say is hyper-aggressive. My best investment ever was in a stock that, at the time, had a P/E ratio of 70.

I also do not agree that the stock market is overvalued. To me, where I'm sitting, the stock market is fairly valued. Short of an extreme exogenous event, like a nuclear bomb wiping out all of NYC's financial district, I don't see that much downside risk to the market, at least compared to 1999-2000. Back then, the P/E's of blue chip mega-cap stocks like walmart were around 40 and above. That is unsustainable. But a P/E of 14-19? Very sustainable. This is where the S&P is right about now, depending on what you look at. (That's trailing p/e, not forward.)

I wouldn't say I'm overly bullish. I'm a hyperbull when compared to many people who post here on itulip. I see myself as market neutral. If I had to hazard a guess, I would say the indices will end the year very close to where they started. I don't see a lot of opportunities or compelling valuations in many stocks, but there are a few. Also, I do not consider myself a "trader" but rather an investor. This is why I would rather invest in a gold mining company as opposed to gold itself. I actually have not changed any major position since last April, when I bought a compellingly-valued cigarette making company.

I K.I.S.S. and let compound interest be my friend.

In the meantime, I keep my eyes peeled for signs of impending collapse of the markets. It still seems to me like there is a lot of liquidity out there, and there is a strong demand for stocks.

Remember, I think it was last summer Jim, I linked an article about how from 2004-2005, the companies of the S&P 500 spent over $200 billion in stock buybacks. These stock buyback programs are still going strong, decreasing supply of stock. Remember economics 101, supply and demand. Keep demand constant, decrease supply, and prices increase.

Bottom line: 2007 is NOT fundamentally anywhere near 2000. Therefore I see much less risk now than there was in 2000. The biggest risk, of course, is a crashing value of the dollar, but since most of my holdings have large international components (or are non-American companies to begin with), I feel I'm fairly hedged against a disorderly drop in the dollar.

[Jim Nickerson]

Re: Bullish Information

Jim, to me I'm still trying to decide whether 2007 will be more 1999 or more 2000. It looks more bullish overall, because the stock market tends to like consumer spending. Increased wages, decreased energy price, and I read a piece where the stock market going up last year added somewhere around 800 billion in personal wealth, these factors could lead the markets to a more 1999 type year.

Right now I'm still holding onto my stocks, and I'm in a wait and watch mode. If 2007 turns out to be like 1999 more than 2000, I'm going to kick myself. I feel that you and the rest of the itulip contributors are giving me the tools I need to know when to get completely out of my stock positions and liquidate into cash and maintain gold-based securities.

If you have time, read Sy Harding's comments (short) http://www.decisionpoint.com/TAC/HARDING.html

"Commodity prices, including those of crude oil, copper, and gold, plunged even more sharply than stocks. Gold for instance closed down 5% for the week. Crude oil fell below $57 for the first time in months. That didn't make a lot of sense if the economy is actually returning to a growth path, which would create higher demand for commodities, and would even be expected to be inflationary (which would be a positive for gold). Gold plunged a big $21 an ounce this week, $19 an ounce on Friday alone, even after the strong employment numbers for December were released."
"However, investing in commodity futures is a sizable activity of institutional investors. The fact that commodities also sold off, especially so sharply, and regardless of whether economic reports were weak or strong on any given day, indicates across the board selling. It looked to me like money managers and hedge funds have indeed waited until after year-end to join corporate insiders in lightening up on holdings of all types, in anticipation of an overdue correction."

"So, nothing that happened in the markets this week changed my expectation that the market in 2007 will wind up as a winner by year-end, but will have to go through some rough patches on its way there."

Demon, if you want to attribute my giving you any tools, you better be careful with whatever you think you might have picked up from me.

I had more money on 1/1/99, than I have today (and I had a fair amount more at the end of 1999), and that does not take inflation into account. I don't have less today because I have spent like a drunken sailor in the past 8 years. I have less because I was swept into the hyperbolic ascent of the market in 1999 and did not have something like perhaps good sense to get out. As painful as it would have seemed during 1999 not to have been in the market, I would be better off right now to have been in T-bills since 1/1/99 (again without regard to inflation), despite having had some reasonably good years from '03-'06.

You seem to be abreast of most of what is written on iTulip plus whatever other things to which you look for understanding. I guess everyone looks for something on web, in the media to guide one in investment decisions (everyone being non-professionals who manage their own monies). Looking for clues is the only reason I read. I have mentioned elsewhere I do not know diddle about Elliot wave theory, but what strikes me about it, when I read someone's wave counts that I can seemingly comprehend, is the repetitiveness of how those wave counters can demonstrate similar behaviors between assorted stocks and indices, and I believe not all patterns seem amenable to wave counting. I ask myself, how could these same apparent patterns show up in so many places? My answer is that it is explainable only by the prices moving based on the psychology of people buying and selling stocks. My conclusion, right or wrong, from this is psychology has a whole lot to do with trends in the markets. And I think I really believe this to be as near correct as anything I think.

You may have kept up with the Bearish Thread. It's up to you, but go back and read just what I posted, or the linked articles if you are really compulsive, in that thread numbered 47, 49, 50, 53, 56, 58, 60, 62. If I wrote those down correctly, and if I didn't screw up in just persusing that thread, there is a helluva lot of bullishness right now, and if by disposition or whatever, you are bullish, I think those articles are all highly comforting. But to me, they mostly raised the question, if everyone is bullish and thus invested long, who is left to raise the markets?

Not intending to put forth a guideline for anyone, I am setting on 75% cash right now, and I am more worried about the 25% that isn't in cash. Richard Russell, who is not omniscient, today wrote CRB chart "Not a pretty picture--in fact, it's a deflationary picture." Copper, "It's a time-honored barometer of the world economy. The trend here is clear enough. I call this a "waterfall formation." And it is not inflationary."

The possibility of deflation worries me, and that it is so discounted as having any likelihood of occurring also worries me. PM's, commodities have taken a real hit in the last 10 days or so, and I was fortunate, so far, to take some gains and losses and have gotten out, thus having avoided some significant losses in the last 2-3 weeks in how I was positioned. There are some people on this board who are many times smarter than I about markets, who seemingly to me in their own minds have all the bases covered--which is good. I wish I could do it and be comfortable, but I am not sophisticated as to be able to accomplish that.

I wish I had been smart enough to have been long equities since the past summer lows, and had I been, I hope I would have lightened up on them a lot as this market has hit marginally new highs here and there. On the other hand my psyche might be, this baby is going to keep on keeping on. The latter may be correct until it doesn't. In my opinion, the market is dangerous right now. I cannot find anyone who I think is credible who I remember thinks otherwise, but perhaps I suffer from selective recollection.

The fundamentals of what is going on right now, to me, look as though 2007 is shaping up to be more like 1999. There is still a ton of cash out there that is looking to be invested somewhere. Already we have M&A things going on, just look at the Caremark deal.

Well being scared right, my "ton" of cash is going to stay in my money market "pocket" until the markets comes down which might be days weeks or many months, who knows?

I will say, however, that I think I read a report somewhere that stated that the dollar tends to strengthen in January. I'm not sure where I read that or why that is the case, but I do remember reading that somewhere.

Here is an short interesting article on trading the dollar based on what it does the first 8 days of January. Perhaps it is what you read. http://www.financialsense.com/editor...2007/0101.html

With regard to this, if I don't get distracted, I will at least see where this guy's possible trade comes out next Friday--the 8th day of January.

[DemonD]

Re: Bullish Information

Jim, to me I'm still trying to decide whether 2007 will be more 1999 or more 2000. It looks more bullish overall, because the stock market tends to like consumer spending. Increased wages, decreased energy price, and I read a piece where the stock market going up last year added somewhere around 800 billion in personal wealth, these factors could lead the markets to a more 1999 type year.

Right now I'm still holding onto my stocks, and I'm in a wait and watch mode. If 2007 turns out to be like 1999 more than 2000, I'm going to kick myself. I feel that you and the rest of the itulip contributors are giving me the tools I need to know when to get completely out of my stock positions and liquidate into cash and maintain gold-based securities.

The fundamentals of what is going on right now, to me, look as though 2007 is shaping up to be more like 1999. There is still a ton of cash out there that is looking to be invested somewhere. Already we have M&A things going on, just look at the Caremark deal.

I will say, however, that I think I read a report somewhere that stated that the dollar tends to strengthen in January. I'm not sure where I read that or why that is the case, but I do remember reading that somewhere.

[Jim Nickerson]

Re: Bullish Information

I can't tell if this is bullish or bearish, but I'm going more bullish. Companies want workers but there is too much work and not enough skilled people:

http://money.cnn.com/2007/01/04/news...ion=2007010416
(emphasis added)



My own little opinion addition:
It's great to be 29 years old with a masters degree in the US nowadays.

On a contrarian basis, its bearish if it is replicating 2000.

[DemonD]

Re: Bullish Information

I can't tell if this is bullish or bearish, but I'm going more bullish. Companies want workers but there is too much work and not enough skilled people:

http://money.cnn.com/2007/01/04/news...ion=2007010416
(emphasis added)

Skilled worker shortage hurts U.S.
Employers would be hiring more if they could just find the skilled workers they need...

Economists are forecasting that overall the unemployment rate in December stayed at 4.5 percent. But the rate for college-educated workers was just 1.8 percent in November, near the rate for that group in 1998 and 1999, when the economy was white-hot. The lowest rate for college grads on record was 1.5 percent in three months during 2000.

My own little opinion addition:
It's great to be 29 years old with a masters degree in the US nowadays.

[Jim Nickerson]

Re: Bullish Information Re: Bonar

1/1/07 James West http://www.financialsense.com/fsu/ed...2007/0101.html

West wrote, "US Dollar [ http://www.buythebottom.com/usd.html ]
Net-commercial position decreased by 126 contracts. After the US Dollar index broke down, it found support near the 82.5 level. From there the index rallied to 84 during the month of December. Net-commercial position remains elevated at 15,051. The commercial setup to the upside remains largely intact even after December’s rebound; to me this is forecasting higher prices yet to come. (With a probable target at prior resistance in the 87 – 87.5 range)"

[Jim Nickerson]

Re: Bullish Information

December 30, 2006
Technical Market Report
by Mike Burk

http://www.safehaven.com/article-6607.htm

"January in the 3rd year of the Presidential Cycle, measured by average return of the OTC, has been the strongest month in the 48 month Presidential Cycle with an average gain of 8.2%."

"Measured by the SPX, the average return of 3.1% since 1928 in January during the 3rd year of the Presidential Cycle has also been the best month of the 48 month Presidential Cycle."

"The SPX, like the OTC, was also down in the most recent 3rd year January. Prior to that you have to go back to 1953 when the SPX lost 0.3%."

[Jim Nickerson]

Re: Bullish Information

January 01, 2007
Leading Indicators Tell Us What to Expect in 2007
by Clif Droke

"It has been several years since this many bullish technical and fundamental factors have conspired to point to a bull market for stocks as we approach the start of a new year. Just listing them all would fill up several reports. The diminishing supply of stocks, persistent bearish investor sentiment, increasing liquidity, record corporate cash, and record valuation are just some of the reasons why the months ahead should be bullish for stocks."

"Part of this has been reflected by the unusually large percentage of "neutral" investors in the AAII investor sentiment polls since 2003, a phenomenon we've commented on at length in the past. What happens when these sidelined investors, who have trillions parked in cash, decide to enter the stock market in 2007? Mark Dodson of Hays Advisory answers thusly: "When the public starts buying, it will be in a stock market with a smaller supply of stocks, causing an equity supply shock....a welcome change.""

[Jim Nickerson]

Re: Bullish Information

Out of curiosity for 10 days I have kept track of the number of views of this Bullish and the other Bearish thread.

There have been 220 new views of the Bullish thread.

There have been 398 new views of the Bearish thread.

I don't what that means, if anything. Possibly it suggests there are more "bulls" wondering if there is anything new under the sun to turn them bearish.

Or, perhaps a lot of "bears" continually seeking support for their negativism.

Probably some of both.

[Jim Nickerson]

Re: Bullish Information Re. Gold, PM's, and PM stocks.

Martin Weinberg Themes for 2007, 12/28/06 http://www.financialsense.com/Market...2006/1228.html

Personally I enjoy reading Weinberg on most Thursdays when he writes Market Wrap Up on financialsense.com.

This week he makes his bullish points about gold, PM's, and PM stocks, but he looks at a number of interesting things. One among them is the comparison using charts of Cisco in 2000 and Toll Brothers in 2005.

His perspectives are worth reading in my opinion.