January 2011

The Economist has a funny map on its cover this week.  It shows the troubled state of our Union.

President Obama used different words to describe the State of the Union from his perspective.  Here is a Word Cloud.

According to CBS News, President Obama's State of the Union speech included more than 6,500 words, led by variations on "America," "people," "new" and "jobs," with "future," "work" and "years" also high in the word count. While word repetition doesn't offer any deep analysis of the speech, the broad message is clear: "American people need new jobs and work in future years."

Market Commentary

The Markets were ripe for a pull-back.  I say that only because the climb higher has seemed un-relenting, in the face of good or bad news.  Recently, technical indicators showed some underlying weakness, but price marched forward. Finally, this past week, we saw some selling pressure.

The real question isn't whether buyers will step back in, rather, it is whether sellers will apply some pressure.

Last week we got a GDP number that wasn't great, but it wasn't terrible either.  Combine that with the political unrest in Egypt, and some less than stellar earnings reports … and the pull-back seems mild.

Price is still the primary indicator.  This chart is just an early warning to pay attention.

So, What is Jim Rogers' Advice? … One Word: "Commodities".

“If the world economy gets better, commodities are going to make a fortune. If the world economy does not get better, commodities are the place to be because they are going to print more money, and that’s how you protect yourself,” investor Jim Rogers told Larry Kudlow on CNBC.

“This is the time when you should own real assets, not stocks and bonds. Throughout history, go back and look, you know we had huge inflation in the 70s, stocks were not in a good place to be,” he said.

"Given the uncertainties surrounding the global economy, investing in commodities is your safest bet," says Rogers.

From my perspective, I'm watching where smart money asset flows point.  There is always something working in the markets.  Our job is to find what's working and avoid the rest.  Easy, right?

The Economist has a funny map on its cover this week.  It shows the troubled state of our Union.

President Obama used different words to describe the State of the Union from his perspective.  Here is a Word Cloud.

According to CBS News, President Obama's State of the Union speech included more than 6,500 words, led by variations on "America," "people," "new" and "jobs," with "future," "work" and "years" also high in the word count. While word repetition doesn't offer any deep analysis of the speech, the broad message is clear: "American people need new jobs and work in future years."

Market Commentary

The Markets were ripe for a pull-back.  I say that only because the climb higher has seemed un-relenting, in the face of good or bad news.  Recently, technical indicators showed some underlying weakness, but price marched forward. Finally, this past week, we saw some selling pressure.

The real question isn't whether buyers will step back in, rather, it is whether sellers will apply some pressure.

Last week we got a GDP number that wasn't great, but it wasn't terrible either.  Combine that with the political unrest in Egypt, and some less than stellar earnings reports … and the pull-back seems mild.

Price is still the primary indicator.  This chart is just an early warning to pay attention.

So, What is Jim Rogers' Advice? … One Word: "Commodities".

“If the world economy gets better, commodities are going to make a fortune. If the world economy does not get better, commodities are the place to be because they are going to print more money, and that’s how you protect yourself,” investor Jim Rogers told Larry Kudlow on CNBC.

“This is the time when you should own real assets, not stocks and bonds. Throughout history, go back and look, you know we had huge inflation in the 70s, stocks were not in a good place to be,” he said.

"Given the uncertainties surrounding the global economy, investing in commodities is your safest bet," says Rogers.

From my perspective, I'm watching where smart money asset flows point.  There is always something working in the markets.  Our job is to find what's working and avoid the rest.  Easy, right?

As the markets hover in the rare air of their recent advances, there is a quote I've thought about several times recently.  It is a little colorful … yet, it gets the point across.

Market Wizard, Ed Seykota, reminds that:

BusinessInsider had an interesting piece on David Einhorn's criticism of Ben Bernanke in his fourth quarter letter to investors.  Here's what he wrote:

On August 27, 2010, Fed Reserve Bank Chairman Ben Bernanke gave a speech in Jackson Hole, Wyoming where he hinted that the Fed would provide additional monetary easing. At the time, the S&P 500 was down more than 3% for the year. From that point through the end of the year, the s&P rallied 19%. At the same time, oil prices rose 16%, copper prices rose 32%, coffee prices rose 34%, corn prices rose 43%, and cotton prices rose 57%.

In front of Congress, Mr. Bernanke credited his policies for "significant improvements in stock prices" which are "contributing to a better outlook for the economy." Mr. Bernanke also said his policies are not to blame for the sharp increase in the price of oil, which he claimed is the result of strong demand from emerging markets. Does Mr. Bernanke really believe anyone buys that? Ostensibly, it's a coincidence that many of the necessities of life came into simultaneous shortage and shot up in price just as Mr. Bernanke promised additional monetary stimulus.

Later in the letter, Einhorn continues the tirade against Bernanke for, among other reasons, that Bernanke told "60 Minutes" that he was 100% certain that the Fed could control inflation. Einhorn's take: "As for the future, we are 100% certain of nothing."

As the markets hover in the rare air of their recent advances, there is a quote I've thought about several times recently.  It is a little colorful … yet, it gets the point across.

Market Wizard, Ed Seykota, reminds that:

BusinessInsider had an interesting piece on David Einhorn's criticism of Ben Bernanke in his fourth quarter letter to investors.  Here's what he wrote:

On August 27, 2010, Fed Reserve Bank Chairman Ben Bernanke gave a speech in Jackson Hole, Wyoming where he hinted that the Fed would provide additional monetary easing. At the time, the S&P 500 was down more than 3% for the year. From that point through the end of the year, the s&P rallied 19%. At the same time, oil prices rose 16%, copper prices rose 32%, coffee prices rose 34%, corn prices rose 43%, and cotton prices rose 57%.

In front of Congress, Mr. Bernanke credited his policies for "significant improvements in stock prices" which are "contributing to a better outlook for the economy." Mr. Bernanke also said his policies are not to blame for the sharp increase in the price of oil, which he claimed is the result of strong demand from emerging markets. Does Mr. Bernanke really believe anyone buys that? Ostensibly, it's a coincidence that many of the necessities of life came into simultaneous shortage and shot up in price just as Mr. Bernanke promised additional monetary stimulus.

Later in the letter, Einhorn continues the tirade against Bernanke for, among other reasons, that Bernanke told "60 Minutes" that he was 100% certain that the Fed could control inflation. Einhorn's take: "As for the future, we are 100% certain of nothing."