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The Intelligent Trader's - Long and Short of It
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From: Robert A. Christy Editor/Publisher, ‘The Intelligent Trader’ http://www.intelligent-trader.com http://www.christyinvestments.com
Date: September 5, 2009
This week was nothing short of amazing in terms of news.
Obama is catching flak for wanting to talk to school children … It just doesn’t look very presidential if you ask me. If I had any kids in school, I would keep them home.
Obama is going to address a joint session of Congress. I think he should do this during the day and not during primetime. He’s making a huge mistake pushing healthcare down our throats when people are more concerned about the economy and whether or not they will have a job next month. The administration has misread the tea leaves on this one. The wise thing to do is to pull back and re-group. The arrogant thing to do is to tie this issue to the economy and continue to ramrod it through. Congress is task with doing the people’s business and not the emperors.
The SEC admits it screwed up when it came to Madoff. No kidding. All of the career bureaucrats that bungled this should be put out to pasture. Also, if it can be proven that their negligence would have prevented the losses, the government should be held liable to make good on the losses and then some. I’ve lived through a number of SEC audits and believe me when I say that they are absolutely no fun.
The price of gold is on a tear and now sits just under $1,000 an ounce. Somebody knows something that I don’t. I am long gold (Kinross Gold: KGC) and Silver (Silver ETF: SLV).
People own gold to protect themselves in times of uncertainty. Times today are clearly uncertain. In looking through an old textbook to find an answer, I was reminded that people own gold for several reasons: (1) protection from inflation; (2) concerns about the stock market; (3) a banking crisis; and (4) as a store of value because fiat currency is nothing but paper.
Other news:
The recession is not over
The downsizing and cutbacks in business continue. The population of Florida is falling. Workers who have longed for retirement are putting those plans on hold. The unemployment numbers continue to climb and the number this month screamed out 9.7%. This is the highest number since 1983.
The administration did what was predictable and that was to blame Bush. The finger pointing is getting old. This mess drags on because employers are assessing the damage and looking to the future. Business owners don’t like what they see. The expansion won’t begin in earnest until business owners see a better future for them and their businesses.
Suffice it to say the once the 10 percent level has been breached, it could go as high as 12 percent.
Sales are lagging.
This is one of those no kidding comments. When times are tough, people cut back and tighten their belts. The logic here is simple – when people don’t spend – businesses don’t ring up sales.
People are doing what is sensible and that is paying cash and reducing their credit card purchases. People are putting off until tomorrow.
So what’s next …?
When the market crashed in 1929, it wasn’t the bottom. People don’t realize that. I am a firm believer that history repeats itself when you haven’t learned from your mistakes. We haven’t learned a thing from our past mistakes.
The market rallied a number of times before it finally bottomed out in 1932. At the bottom, 90% of the market was gone.
The talking heads will be chirping this month and next about ‘one year later’ and what have we learned. Congress is likely to do the same What they won’t tell you is this – They won’t compare post 2008 to post 1929 – which is a big mistake. It’s simple - more businesses are in trouble today than last year. More banks are failing and the list grows weekly. Foreclosures continue to rise. Commercial real estate problems are just now beginning to surface. According to Bloomberg, there are more than 5,000 commercial properties in default. This report was based on data gathered through June. Common sense suggests that this number is likely to double before the year is over. Bloody September The market has been on a tear for the past couple of months and we may have hit the brakes early last week when the market paused. No market goes up forever – unless you are one of the talking heads.
September is a rough month – tread lightly. The odds are against any meaningful move to the upside.
September is one of those months where natural contractions occur. I talked about this last week. October is also a tough month as well.
I’m troubled by what I hear on TV. The
sheer number of analysts advising people to put money into equities at
these levels is troubling. People are desperate to get in on the action.
They just don’t realize that they are the main course.
That’s it for now.
That’s about it for now. Let me here from you if you have any questions.
Robert Christy
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P.S.S. The currency market (forex) is the place to make money this year. If you’d like to know more about how you can participate in this, just send me an email and I’ll send out the information to you.
P.S.S.S. Please fee free to forward this to your peers, friends and anyone 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 currency trader, stock trader, money manager, author and speaker. Mr. Christy is the President CEO of Christy Investment Group, Ltd., a fee-only registered investment advisory firm. He is also the Managing Partner and Portfolio Manager of Crabapple Capital Group, LLC and the editor/publisher of The Intelligent Trader, a subscription based long/short trading service. At the time of publication, Mr. Christy may from time to time write about stocks in which he, Christy Investment Group Ltd, Crabapple Capital Group, LLC or The Intelligent Trader 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@intelligent-trader.com .
Robert Christy The Intelligent Trader
The Christy Investment Group P.O. Box 625 Alpharetta, GA 30009-0625
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© Copyright 2009 Robert A. Christy, The Intelligent Trader
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