Capitalogix

Some Thoughts for the New Year

You never know where a spark of inspiration will come from.  Sometimes you get it from a quote or a story; other times it might come from a question ...

The truth is that sources of inspiration are always there for you.  The question is whether you are looking for them or notice them when they show up.

Here's a source that I value for its practical wisdom and insights. 

"Today Is Your Day to Win" is a series of 99 daily lessons, delivered by e-mail. On more than a few occasions, it brought me a message right when I needed it.

It is written by Mike Brescia of Think Right Now, and it doesn't cost a cent.  Of course, to get the benefit, you will have to invest some time and mental cycles to consider the content.

Here is a sample from one of the messages.

Good Things Will Come To Me When I  ...

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 Today's Empowering Quote
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"The best preparation for good work tomorrow is good work today."
     --Elbert Hubbard

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 Today's Empowering Question
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 "What can I do now that will prepare me for tomorrow?"

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 Today's Fast Session 
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Often the most frustrating thing that any of us feel on a regular basis is to want something really bad, and not be able to get it right away.

Yes, it's frustrating.  But it's usually not realistic, is it? ...

It's getting so that it's increasingly rare to find people who are truly willing to put in the requisite time necessary to get the traits or items they want.  Our world today is trying to teach us that we must get what we want immediately; that it's our right.  And that's why so many of us are jealous, smoke or drink, are overweight, use drugs, etc. ...

Life is NOT like school.

In school, you can trick yourself into thinking you're doing great if you cram for exams and get decent scores. It is possible to get fairly good grades for a while that way.

But you don't learn it.  You're likely to just remember it until the exam is over... maybe.

That's why new college graduates often find it difficult to find a decent paying job.  Companies like successful work experience.  In college, you can fool the system and yourself.  In the professional world and in most other areas of life, it's a lot tougher.  Almost impossible.

Real life is truly like a farm.

On the farm, you must move the rocks, buy seeds and all the other stuff, plant the seeds, buy and maintain the equipment, pull weeds, keep the pests away, water the crops, buy and sell the animals, feed them, nurse the sick ones back to health, fertilize, etc.  And you need to keep up with it all everyday...


Or you won't have a crop at the end of the season.

Life is like this, too.  Just like a farm, you can't "cram" in life.  Don't be fooled.  Don't believe the lies that others want you to believe.  You want to believe it. I know you do.  But think.

The people who have the things you want earned them.  And don't believe they just got lucky.  Luck takes work. 

Put the effort in today and you'll get luckier and luckier.  Will it be immediately?  Probably not.  Beat this into your head... Anything worth having takes time to get it.

When I'm tempted to believe that I should have something (before I've earned it), I think of my grandparents.

They owned a farm.

And I realize that life can be long and that I can't put tomorrow before today.

Then I look at my goal, put my shoulder down and keep going...

With a smile on my face.

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Today's Winning Beliefs
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-- I'm at peace with my responsibilities.
-- I'm preparing myself for tomorrow today.

Here is a link to the complete archive of lessons.

Let me know if you found other sources of inspiration worth sharing.

Related articles

• Quotes to Make You Think: 2010 Collected Quotes (ezrasf.com)
• Do you believe in luck? (successful-blog.com)
• Are You Successful? (thinktq.com)

A Humorous Look at How Bail-Outs Work - Life in an Irish Town

So this is how it's done ...

It is a slow day in a damp little Irish town. The rain is beating down, and the streets are deserted.

Times are tough. Everybody is in debt and everybody lives on credit.

On this particular day, a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.

The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the pub.

The bar owner slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.

The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.

The hotel proprietor then places the €100 note back on the counter so the rich traveler will not suspect anything. At that moment, the traveler comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money and leaves town.

No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.

And that, ladies and gentlemen, is how the bailout package works.

Related articles

• Why Ireland Is Like Texas (minyanville.com)
• Texas, Ireland and Ten Little Indians (investorsinsight.com)

Capitalogix Commentary 12/27/10 - Sentiment in Holiday Spirits

Market Commentary.

The S&P 500 Index has had quite a run.  On Wednesday, Bespoke noted that it has been up 14 out of 16 days.  Since 1990, the S&P has only been up 14 out of 16 trading days two other times -- once in September 1995 and once in May 1990.

So, You Might Guess That Bullish Sentiment is High.

Well, it is probably higher than you realize.  We haven't seen readings like this in a long time.  The American Association of Individual Investors poll had the highest percentage of bulls (63) since October 2004, and the lowest percentage of bears (16) since October 2005.

 

Moreover, lots of other sentiment measures are showing similar readings. 

Carl Swenlin, from DecisionPoint, reminds that while high levels of bullish sentiment among advisors, investors, and money managers usually occur at market tops, market tops do not always occur when sentiment is very bullish. Sometimes people respond to the obvious and correctly align their market posture with the price trend. In situations like this we have to wonder whether or not they are wrong.

In other words, an excess of bullish sentiment is a caution sign and should cause concern because such sentiment peaks are often followed by price corrections, if not bull market tops.  However, that doesn't mean it is safe to use sentiment as a timing tool. Perhaps sentiment is better used as a simple indicator to help paint a picture of the market environment. So far we have no indication from our trend-following models that there are major problems ahead.

Another Measure Brims With Confidence.

Here is a slightly different take on perceived risk.  The Barron’s Confidence Index is a confidence indicator calculated by dividing the average yield on high-grade bonds by the average yield on intermediate-grade bonds. The discrepancy between the yields is indicative of investor confidence. For example, a rising ratio indicates investors are demanding a lower premium in yield for increased risk  and thus are showing confidence in the economy. 

As shown below, there has been a solid improvement in the ratio since its all-time low in December 2008.  This indicates that bond investors have grown significantly more confident, opting for more speculative bonds over high-grade bonds. The ratio is back at levels last seen in October 2007, before the financial crisis.

Presidential Cycle Points to a Bullish 2011.

Here is another piece of data pointing upwards.  Historically, the third year for a president produces a good return for investors. Investment strategists Liz Ann Sonders and Sam Stovall say why 2011 will be no different.

 

Bottom-Line:  The economy and stock market end the year stronger than expected.  Happy New Year!

Business Posts Moving the Markets that I Found Interesting This Week:

• Forecasters Predict a Strong Recovery in 2011. (NYTimes)
• The Black Swans of 2011 - From Saxo Bank. (PragCap)
• Meredith Whitney Says 50-100 U.S. Cities Might Go Bust in 2011. (BusinessInsider)
• Amazon Sold 8MM Kindles in 2010 - Is There a Natural Limit? (Ritholtz)
• Forbes List of the World's Billionaires - and the New Richest Man. (Forbes)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• A Look Back at the Biggest Controversies of 2010 (TheWeek)
• Holiday Spoof: Mariah Carey's "All I Want for Christmas Is … Jews". (Ritholtz)
• "Think and Grow Rich" Download. Great Reading for the New Year. (Entrepreneur)
• The FCC Splits the Internet in Two: Fast or Slow Are Your Choices. (TDB)
• Trick Play Used to Win the TX High School Football State Championship. (BizInsider)
• More Posts with Lighter Ideas and Fun Links.

Related articles

• Is the Extreme Bullishness Cause for Concern? (pragcap.com)
• Despite Headlines, Investor Sentiment Remains In Extreme Bullishness Territory (businessinsider.com)

Holiday Wishes

Hopefully you are spending some quality time with family and friends. 

Let me start by taking a moment to wish you all the best during this holiday season.

Your friendship and loyalty is deeply appreciated.

May this holiday season bring you wonderful memories that last a lifetime - and may 2011 prove to be your most profitable year ever.

Happy Holidays and Best Wishes for the New Year!

Uncle Jay Sings the News - Year-End Summary Song

I look forward to this each year.  Watch as Uncle Jay sings his year-end summary of the news.

Uncle Jay has a website he says "helps small minds understand big news".  Happy New Year.

"Imagine" - A New Song Around the World, by Playing For Change

Here is something worth sharing for the holiday season and new year. It is a video of different musicians, playing around the globe, combining their talents to create a new version of of John Lennon's classic, "Imagine".  Here is the video.

 

Imagine from Playing For Change Foundation on Vimeo.

Here is a link to "Stand By Me".  And here are more Playing For Change videos. 

Song Around the World.

It toook almost a year for the Playing For Change crew to complete John Lennon's "Imagine." Like other Song Around the World productions, it is played by various musicians from around the world.

Creating this piece took the crew from the favelas of Brazil to the shrines of southern India, from villages in Nepal to the glittering urban landscape of Tokyo and New York, and beyond.

The filmmakers asked musicians to record their version of the song by themselves. The finished project combines these performances to create an a "music video" of these artists playing together.

The Playing For Change Foundation and Yoko Ono joined together to launch the Power to the People campaign. The campaign seeks to advance John Lennon’s vision of peace by engaging artists and audiences to contribute to music education programs worldwide. Proceeds raised will help build music schools, support teachers and music programs, purchase instruments, and connect schools for cross-cultural learning and conflict resolution across borders.  As they say "Music IS the power: Power to the People."

Find out more at Playing For Change.

Related Articles

• John Lennon's 10 Best Songs, as chosen by Yoko Ono (current.com)
• Playing for Change Connects the World Through Music (abcnews.go.com)
• Playing For Change Foundation and Theatre Within Advance John Lennon's Vision for Peace With POWER TO THE PEOPLE Campaign (prnewswire.com)
• Street Musicians From Across The World Play For Change (npr.org)

Capitalogix Commentary 12/20/10 - Price Stays High as Breadth Weakens

The Markets are up, so all is well.  Meanwhile, Obama Claus is suited-up and ready to continue delivering the debt. Consider it our gift to future generations ...

Market Commentary

The S&P 500 Index remains at the top of its trading range and is making new highs for the year. 

 

Watch For Weakness as Breadth Weakens.

Notice the negative divergence, marked by the red arrow.  While the S&P 500 Index surged higher, less than 80% of the stocks in the index are trading above their 50-day moving averages.  This means that not all stocks have been participating in the current rally, which is a potential warning sign of impending weakness.

 

Looking For a Positive Sign? 

Lumber is surging.  Moreover, the Homebuilders SPDR and the Home Construction iShares  both are showing strength. This may show an increase in demand and often implies more construction.

 

Seems like good news to me.  Jim Cramer recently advised: "It is never too late to change. Things are good, not bad. Don't play irony. Don't be too skeptical. Be opportunistic."  What do you think?

The Year-End Bespoke Roundtable.

 

At the end of each year, the big financial media outlets typically conduct roundtables to get outlooks from key players in the financial markets.  The Bespoke Roundtable asks twelve of the most popular financial blogs/websites the same 34 questions regarding their 2011 outlooks and their take on 2010.  There are many insightful tidbits worth thinking about.

 

The consensus view is that the S&P 500 will be up in 2011, bonds will be down, oil will be up, the dollar will be up, US home prices will be up, and China's stock market will be up.  Interestingly, the consensus view was the exact same as it was last year for all asset classes except for gold.  Less participants think gold will go down in 2011 than they did in 2010.  Here is the link to the full post.

Business Posts Moving the Markets that I Found Interesting This Week:

• Is Worldwide Corruption on the Rise? (Time)
• Americans' Wealth Grows, Lifting Hopes For Economy. (AP)
• When Will China Overtake America as the World's Biggest Economy? (Economist)
• Currency: The Year of 'Printing Money'. (BizWeek)
• What Was the Biggest Market Event of 2010? (InvestorPlace)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• NASA Discovers New Arsenic-Based Lifeforms. (Newser)
• Apple Prepares New Camera-Toting iPads for Q1 Release. (Reuters)
• Hidden Code Found in the Mona Lisa May Reveal Her True Identity. (Newser)
• A Million Free Google Books in ePub - for Kindle too (KindleWorld)
• Adult Picky Eaters May Actually Have a Disorder. (MSNBC)
• More Posts with Lighter Ideas and Fun Links.

Related articles

• Technical Talk: S&P 500 has bullish bias, but breadth deteriorating (investmentpostcards.com)
• Cumulative Breadth Not Keeping Up With Indexes (tradersnarrative.com)

Technology Makes Holiday Shopping Easier This Year

Shopping is crazy during the holiday season.  Here is a picture of someone who drove their car into a Walmart because the line was too long. 

image from People of Walmart.

If you are looking for a good deal and want to avoid crowds, try the Camel Farm.

It's a strange name ... and a great site. They provide historical price charts for Amazon and other retailers -- so you know you are getting a great deal.  Here is an example, but you can choose any product.  It works great.

They also will send you price drop alerts via email, and have an intuititve system to help you find deals.

 

Another service I like is Bountii.

You can look here for other shopping tools and services.

Keep shopping.  The economy needs you.  

Related articles

• Don't Start Your Holiday Shopping Without This Amazon iPhone App (businessinsider.com)
• A two-tiered Black Friday (ftalphaville.ft.com)
• 10 iPhone Apps That Make Holiday Shopping Easier (businessinsider.com)

Capitalogix Commentary 12/13/10 - Is the Rally Fake?

I'm in Indonesia finishing a business trip. 

 

While there, this sign caught my eye.  A fake Obama urges users to buy genuine Microsoft. 

Meanwhile, Obama and the Fed Declare That Market Gains are Genuine.

Here is a chart showing that the Dow Jones Industrial Average is trading near its recent highs.

Time will tell if the rally holds.  Many traders are happy that the markets have worked-off some of the over-bought condition without a major pull-back from recent highs.  It seems like a healthy base for a Santa Claus Rally.

Business Posts Moving the Markets that I Found Interesting This Week:

• Mixed Messages: Will the Real Warren Buffett Please Stand Up? (HumbleStudent)
• Perhaps the Flash-Crash Taught Exchanges Something. (Bloomberg)
• As Prices Rise, So Do Questions About Commodity Speculators. (Economist)
• Study Claims Twitter Mood Predicts Stock Market Changes. (HuffingtonPost)
• BusinessWeek's List of America's Best Young Entrepreneurs. (BusinessWeek)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• Re-Inventing Libraries to Remain Relevant in the Digital Age. (LATimes)
• Color E-Ink to Comes to E-Readers. (NYTimes)
• Preparing for the Supercomputer War with China. (KurzweilAI)
• Twitter’s Official Analytics Product Has Arrived. (Mashable)
• Portion Size, Then vs. Now. (DivineCaroline)
• More Posts with Lighter Ideas and Fun Links.

Remember the Good Old Days of Reagonomics (Funny)

This made me smile.

Ah, the good old days.  "We told them the wealth would 'trickle down'."

Now, watch video titled “Obama Kicks Door” spoofing the President’s reaction after extending the Bush Tax-Cuts.  While Jay Leno’s Tonight Show obviously faked the video, they probably nailed the President’s reaction to the compromise.  Here it is.

 

via RightPundits.com.

Related articles

• The Early Evidence: Quantitative Easing Does More Harm Than Good (pragcap.com)
• Inside Job: The Gravy Train started here (thestar.com)