It was all too orchestrated for me to believe. Thursday’s huge turnaround rush into the markets was just another example of investors trying to identify a bottom. I’ve said it before and I’ll say it again–that is not how bottoms are formed. (more…)

Does anyone seriously believe that Congress is not going to bail out the auto industry? After all, a lot of labor money has been funneled into various political campaigns throughout the years. Detroit auto workers also vote and who wants 3 million unemployed voters casting their ballots against you in two years. Even the president-elect isn’t going to buck that kind of voting power. (more…)

They call it “TARP” for Troubled Assets Relief Program and it was intended to rescue banks buried under a mountain of toxic sub prime mortgage paper. But a funny thing has happened in the meantime. It appears the money is going to everything but buying up toxic paper. (more…)

Don’t shoot the messenger. Believe me, I would be happy to find a few silver linings in this month’s gathering black clouds but it may well prove impossible. October was a brutal month for the economy and just how bad it was will be revealed over the next few weeks. (more…)

Over the last two days every media outlet, newsletter and forecaster have rushed to offer their views on how you the investor will be affected by the election of our next president. Recommendations on how to profit or protect your portfolio from changes in taxes, healthcare, energy, finance, regulation and so on have formed a virtual avalanche of information that appears to me to be largely repetitive and totally useless. I would prefer instead to focus on some of Barak Obama’s own words in his election night address as it relates to the economy that resonated with me. (more…)

“This has to be the bottom, right?”

“Why?” I ask.

“Well the market went up 10% in one day, that’s a record, right?”

“So?”

“I mean the elections are Tuesday. October’s over. Shouldn’t the market rally?”

And so it goes. Client after client called me this week, flush with cash, sitting on the sidelines, just panting to get in at the “bottom”. Three weeks ago the same people were bailing out, absolutely certain that the markets would never come back in their lifetime. A psychologist would label it schizophrenic behavior. I just call it emotional and over the last couple of decades I’ve learned that emotions have no business in the investment process. (more…)

It’s now official; the nation’s Gross Domestic Product sank into negative territory in the third quarter by 0.3 %. On the surface, that’s not much of a decline but compared to the previous quarter’s 2.8% positive growth rate, it was as if the economy hit a brick wall. It marked the worst economic contraction since the third quarter of 2001. The sharks are definitely circling the economic rowboat. (more…)

Today should have been another meltdown in the markets. It certainly happened overseas where overnight Japan lost 9.6 % while Europe closed off about 5%. The losses in the U.S. markets were “only” 3 plus %. You will most likely read or hear that the markets held and that a bottom is forming. Don’t believe a word of it. (more…)

Our concept of free markets may change dramatically as the result of this crisis. I believe that in the years ahead, the majority of Americans will no longer espouse the laissez faire attitudes of the last century. Instead, markets will be regulated and to some extent controlled by the government. Whether that will turn out to be a good or bad development remains to be seen. (more…)

Who can blame the wary, weary investor? They are faced with markets that swing wildly, the averages gaining and losing more in a day then they usually do in a year. Most have lost a mountain of money and the headlines continue to spew a litany of bad news. The markets are dangerous and yet, stocks are cheap. (more…)