|
From: R. A. Christy
Editor/Publisher, ‘The Long and Short of
It’
President/CEO, Christy Investment Group
http://www.christyinvestments.com
Date: April 12, 2008
| NYSE Bullish
Percent |
Xs @ 46% |
OFFENSE |
| OTC Bullish
Percent |
Xs @ 32% |
OFFENSE |
| Optionable Bullish
Percent |
Xs @ 36% |
OFFENSE |
OK, yesterday was a
crap day for anyone who calls him/herself an investor. Stocks are down
7% or so for the year and the NASDAQ is down more than 12%. Our dollar
is at an all-time low against the euro at $1.57. The yen is at an
all-time high and gold is trading between $900 and $1,000.
The rally that we
were experiencing has washed out this month’s gains and I feel like a
chump. The reason is that I was with a client (who works with GE
Financial of all places) for dinner on Thursday night and I was opining
that I thought all of the bad news was already priced into the market
and that there shouldn’t be many more major surprises. Did I say I feel
like a chump? I thought so.
I find it really
hard to believe that GE missed their earnings number by such a wide
margin. GE’s CEO Jeffrey Immelt uses the word embarrassed in reporting
the numbers. No kidding. If I were in his shoes, I’d be having a meeting
this weekend to see how much stress I could bring to bear on my senior
managers.
On another sad note,
the International Monetary Fund (IMF) says that we are headed for a
recession. The talking heads at CNBC have already pronounced it so. It’s
an election year and they aren’t economists but their bias is evident.
Is the economy slowing? Yes. Have we had two consecutive quarters of
negative growth? No. Note that there is a difference between slowing
growth and negative growth.
Now for some spin on
this thing called inflation. We’ve got it by the boat load, but don’t
tell anyone about it. The folks in Washington have massaged the numbers
so many times that they’re convinced we don’t have much of it at all.
If you look at M3
which is the broadest measure of the printing press, you’ll find that
it’s growing at a better than 15% clip. The demand for money (which is
the goods and services that are for sale) is not rising at anything
close to that rate.
The bottom line is
that the supply of money is driving up prices.
On the commodity
side, oil is $112. The grains are at or near all-time highs. Soybeans
are in the same boat and it’s just a matter of time before the price
increases spill over into the meat complex.
My guess is that
once the prices get a little higher, we’ll have central governments
stepping up to the plate and banning agricultural exports. Once
government intervention begins, it’s going to real interesting.
Think about this for
a while – the dollar is going down and prices are continuing to rise.
This is a recipe for disaster because inflation is going to make
everything worth less. This is government at its very best and the
result will be nothing short of a crisis.
Did you know that
rice is up 50% in price in the past 2 weeks? How many people in the
world rely on rice for the main staple in their diet? I have no idea,
but I will shortly and the number is going to be awfully large.
This past week we
added the Market Vector Agriculture ETF (MOO) to the Long/Short
Portfolio. We also bought a 3 month call option on Boeing (BA). We made
a number of sales as well. For a glimpse of my current portfolio, just
follow this link to
the Intelligent Trader. I’ve taken off the passwords, so that you
can see what I’m currently up to. Due to the market conditions and after
talking to a number of clients, I made the changes that they
recommended.
If you’d like to subscribe to The Intelligent Trader, just click this
link. Your investment is only $249 for a year or $65 per quarter.
The way we start the
week will have a lot to do with how we end the month of April. The
stress level is going to be pretty high and opportunities will be
spotty.
I’m going to add
some gold, coal and fertilizer issues Monday or Tuesday to the
portfolio. Subscribers should stay near their emails for updates. I’ll
leave the password off for the next few days so that all ‘Long and
Short’ readers can see what we picked up.
That’s about it. I’m
going to spend the rest of weekend reading a Danielle Steele book and
watching baseball.
Until next time,
Robert Christy
The Intelligent
Trader
P.S. Please fee
free to forward this to your peers, friends and associates you think
would benefit from its contents. They will thank you for it - and so
will I!
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Robert Christy is a professional stock
trader, money manager and author. Mr. Christy is the President CEO of
Christy Investment Group, Ltd., a registered investment advisory firm.
He is also the Managing Partner and Portfolio Manager of Plato Advisors,
LLC. At the time of publication, Mr. Christy may from time to time write
about stocks in which he, Christy Investment Group Ltd or Plato Advisors
LLC has a position. In such cases, appropriate disclosure is made.
Under no circumstances does the information in this column represent a
specific recommendation to buy or sell stocks. Mr. Christy appreciates
your feedback and invites you to send it to
rac@christyinvestments.com.
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