Posted on 10/17/2005 7:59:53 AM PDT by Travis McGee
The October Newsletter The Leaves Won't Be The Only Thing To Fall! Enrico Orlandini Lasco Report 17 Oct, 2005
We're heading into that time of year where the word "crash" tends to command a bit more respect among market specialists, i.e., the months of October and/or November. Maybe it's just a coincidence, but I see an ominous cloud on the horizon. Actually, I see a large mass of clouds and they're as black as night. Anyone who's invested in the stock market over the last three or four years has little or nothing to show for it and, if you're still invested, you can't be feeling too comfortable right now. In short, a simple saving account would have been a better investment. Then again, when you buy into a market that's selling at 20 times earnings and paying a miniscule 1.75% dividend, what can you expect? Two weeks ago I warned my clients about the "probability", not the possibility, of a crash. What did I see that made me so worried that I would crawl out on a limb all by myself? Frankly, there were and still are any number of warning signals, and I would like to delve into some of them in the space provided below.
The first such warning sign comes from the market itself. Focus your attention on the following daily chart of the cash DJIA and follow along:
Lots of charts and analysis follows, HERE
Natural gas is headed for $15 a thousand cubic feet or million Btu, whichever unit you like, rather than pulling back. The gov't estimates for winter heating costs may be conservative. This will at least bend some household budgets badly, probably break some. But, proactive measures are possible: Don't heat the whole house. Plumbers may be busy, though, and the plumber's bill may be even more than heating costs saved when some water pipes freeze.
Apologies. I did not notice that the poster was also the author. I should have disagreed without the insult.
Oops. I was wrong. You are not the author. Apology retracted - insult reinstated!
Lead, with a large powder charge behind it, may be more valuble than gold at that time.
Whatever. The point of my posting this article was simply to stimulate debate.
The market has been just fine even now.......a correction in October is normal.
I was referring to that specific line about not going anywhere for 4 years......
Small and midcap growth stocks have been spectacular since October, 2002.
I specialize in small caps ......I love spikers.....
Today my stocks did terrific.....
FUEL....JMDT.....ISON.....IMAX....IOTN....MTRX....QDEL....JVA.....
all of which I recently bought at the bottom or in a dip.
Market timing and not being greedy makes me money.
The time of buy and hold ended in 2001.
Contrary to the stock market setting up for a crash in the next few months, I think gold is probably setting up for a fairly large correction back towards $425. The Fed's interest rate increases should slow the economy by early 2006 and limit general inflation to 1%, and then when all the oil refineries are back online the price of gasoline and diesel will probably fall back to early 2005 levels by March 2006. This should set off a big bond market and stock market rally, which will probably start around late November of this year as traders begin to anticipate this counter-inflationary scenario. Gold should start falling at the same time, late next month. I'm looking to get into a bunch of bond funds, REIT funds, and stocks in November, December, and early next year.
My advice is to never, ever put much weight on any predictions or advice from anyone selling gold. Their advice is usually way to pessimistic, while they hide behind legal disclaimers. I'd like to see Laura Ingraham stop hawking gold on her radio show. That's going to end up being an embarassment to her.
The Sun's brown dwarf 'dark' companion has disrupted cometary orbits and has sent a group of destructive comets headed our way. The comets are due to arrive in a time window extending over the next five years.
I hate to be the bearer of really bad news. But the coming stock market crash is very low on the priority totem pole. The real estate bubble pops ... flu pandemic ... then comets ... Then: Hasta la vista, baby!
< / sarcasm> -- are you sure? >
Whatever! How about take the gold sell it back to the coin dealer at whatever price FEDBUX are trading for and buy the building the soup kitchen is in at the depression level price. A lot of people got rich in the 1930's doing that.
Me? I'm gonna use a $100.00 gun to take his soup. ;)
I notice the little smiley. But for the benefit of other readers -- I'll leave the looting to the liberals, self-justifying leftists, thugs, thieves and politicians. Conservatives and Libertarians prefer voluntary trade to strong arm theft. At least I do !
Nonetheless, I've read that long-term contract prices are up from last year and when combined with increases in uncontracted gas, most customers should see a 30-50% increase in their heating bills. But this will not be the huge crisis that some (commodity traders?) are loudly predicting.
Not to mention that the folks I know who have put away some gold, insure it with plenty of lead, brass and steel.
That's true. Some firms habitually lay in contracts several months in advance. They have lucked out this time and got a relatively good price. Some airlines locked in supplies way in advance and aren't in big trouble at the moment; other airlines didn't contract so far in advance and have gotten burnt to the point of bankruptcy. It's a tradeoff because it commits funds. Most businesses would rather not commit funds so far in advance.
LOL...a tinfoil hat won't do you any good when those comets arrive. Bruce Willis will have to lead a mission to blast the comet(s) with nukes and send them away from earth.
Why not? It would be honest. Being a shill is dishonest, would you not agree? Markets are cyclical. In the 1990s, it was tech stocks. Today, it is commodity stocks and commodities themselves.
What will "it" be next? Who knows? We'll figure that out when we get there.
To address your attempt to dismiss, someone buying the S&P 500 in 2001 would be sitting on a loss compared to just about anything else out there. So much for "the stock market always goes up."
What is gold's earnings and what dividend does it pay?
What is a house's earnings and what dividend does it pay? By this same logic, nobody should buy a house. Are you willing to tell people that?
Likewise, Cisco stock pays no dividend and GM has negative earnings. Invest wisely.
You *can* lease gold and earn a return on it that way. Likewise, you can open a Gold CD with Everbank and actually take the profits straight in $USD should you wish to do so.
Presently, the stock market indices are going nowhere; its a sideways market currently. A resumption of a bull market would require the indices to take out their 2001 highs and that just is not going to happen.
Profits are where you find them. There is no single magic bullet for anything. My personal favorite is this:
DJIA, 1971: 1000
DJIA, 2005: 10500
Total Return: 1050%
Gold, 1971: $35
Gold, 2005: $470
Total Return: 1343%
Makes one wonder if the market is simply running on inflation or not if Gold is outperforming it.
When Gold appears to have topped, I'll sell mine and move on to the next thing, just like when I sold out of the stock market in 2001 and plowed into commodities and gold - and laugh my way to the bank.
"All politcal power comes out of the barrel of a gun."
Mao Tse Tung
I think he is referring to the billions of dollars of US treasuries that are owned by foreigners. Since We the People are the issuers of such debt, by proxy we owe money to foreigners.
Unfortunately, some of the people who believe the economy is heading "off a cliff" are acting like lemmings and preparing to follow the lead lemmings off a financial cliff by putting most of their assets into gold and silver. I don't think this is a good time to be betting on higher inflation and higher gold prices. The economy appears to be slowing to about a 2.5% growth rate, real estate prices are gradually correcting back to more reasonable levels in many areas, and gasoline prices will almost certainly fall back under $2.50 by early next year (barring a supply disruption in the Middle East.)
I got out of the market long ago, and have sat and watched many lose their shirts, among other things.
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