Wednesday, September 2, 2009

This is How a Market Looks when it's Out of Gas

Home   |   Archives   |  About Us   |   Privacy Policy   |   Whitelist Us   |   Unsubscribe
September 2, 2009  

Apparently, many of you prefer that we call the stench emanating from Washington and Wall Street by its proper name, even if it is a bit… improper.

On Monday, we asked if you thought we should spell out the word B.S. in our masthead, just so there is no confusion about what we really think. Hundreds of IDE readers wrote in.

The majority of you seem to prefer a bit of profanity with your market research, considering that the political and financial landscape is so profane to begin with. MD writes, "I vote to keep the bullshit in, 'cause that's all we're getting from Wall Street and Washington!"

PB concurs. "Yes it is quite all right, nay refreshing, to hear somebody telling like it is. The public has been blind to the chicanery, cheating, lying and outright stealing of our so-called leaders. Wall Street and politicians have led us into a hole we will not see the top of in our lifetimes. R.I.P."

CT in Tennessee believes that, "honesty is the best policy and the more blunt the better." WB from Australia agrees. He suggests that our own "attitude to frankness is bullshit" if we don't write the word. WD doesn't see what the fuss is about. "What are we, a bunch of tender-eared namby pambys?" he asks.

Yes, some of us are a bit tender-eared, WD.

LW asks why we would degrade our publication "by joining the Garbage Language Gang." RL says, "No, it is not ok. Intelligent people are able to make their point without resorting to expletives and questionable language. When I see inappropriate language, it tells me that the speaker is not well enough educated to express himself intelligently."

KS agrees. "It's like calling someone names because one cannot counter their arguments," he writes.

And finally, LA says, "What is wrong is that on all sides of life, we are witnessing the progressive decadence of our culture. Do you want to contribute to that?" No, LA, we do not. And while we believe a word is just a word, we get your drift.

In this case, we will side with the slightly smaller minority. We won't spell it out in our masthead. But in addition to our critical analysis and profitable advice, you can be sure that we will continue to uncover institutionalized deception. And we will call Wall Street and Washington on their B.S. every chance we get.

Now, turning to more important matters…

"This is how a market looks when it's out of gas."

That's a quote from IDE analyst Steve McDonald following the Dow's 185 point plunge on the first day of September.

Even though the news was good the market tanked

Despite some good numbers from the housing market and an ISM number that beat estimates, the market still lost ground. Steve points out that the ISM (The Institute for Supply Management Index), which measures manufacturing activity, crossed over to 'non-recessionary' territory for the first time since January 2008.

Steve says the market is looking ahead and doesn't like what it sees. Mr. Market ain't the only one who doesn't like the view.

"Wall Street's Forbidden Retirement Plan" Could Pay You $7,792 Every 90 Days for the Rest of Your Life. Wall Street firms don't want you to know about what could be the most lucrative retirement program in existence, because they can't make a penny when you sign up. Learn how you could multiply your wealth and even earn yields of 20% or more on some of the world's safest stocks…

Corporate insiders are selling like crazy

Over two weeks ago, we reported that corporate insiders are heading to the exits in droves. This week, Bloomberg TV ran an interview with Tom Biderman, CEO of Trim Tabs Investment Research, a firm which tracks investment flows.

Biderman says that corporate insiders are selling at a furious pace. He says that selling has outpaced buying by 30 times and that corporate buybacks and corporate purchases of other companies' shares are virtually non-existent.

"If you look at the aggregate data, hedge funds and mutual funds have to be fully invested here," he says. "Shorts have covered. Short interest is down 10%. And margin debt is up. So investors are borrowing to buy. We don't see where the money is going to come from to keep stocks from plunging."

Don't be fearful… be cheerful

Nobody's bummed out when their favorite store has a sale. Quite the contrary. They hustle down and stock up.

If you've followed our recommendations the last several weeks to move your stops closer to the market, your downside is protected. A sharp correction means some great buying opportunities will be coming your way. And Steve McDonald already has his eye on a few.

We pay close attention when Steve speaks. He has more than 20 years of direct experience in the markets. And because he's worked with retirees most of that time, his first instinct is toward safety. If you're looking to make exceptional returns… and still sleep at night, we can't recommend his research highly enough. Steve's premier publication is The Bond Trader. You can learn more here.

China in a bear market?

Yup. It's official. The Chinese market has fallen 20% from its peak in early August. Surprised? You shouldn't be. Our own Asia expert Andrew Gordon has been banging the drum for months giving his readers plenty of early warning. Andy has a long career in international business, including considerable time in Asia. He's also written books on international trade.

We value his insight on these matters. And so should you. Here is some of what he's had to say over the last year. It is just as relevant today:

  • "China's recovery is looking every bit as bumpy and uncertain as ours. I have absolutely no faith that a centrally commanded economy has an advantage over free markets in getting healthy again. I've been to China too many times to entertain such naive thoughts.

  • "I've never been impressed with how China's elitist politicians have managed their economy. It's all built on cheap labor. And now several Asian countries – like Vietnam and Cambodia – offer cheaper labor than China.

  • "45 percent of China's economy relies on exports. Its exports have plunged with global demand. Thousands of factories making for-export items have closed. Will one person singing the praises of China's massive stimulus package explain to me how building roads in Jiangxi Province will help factories in Guangdong get back on their feet?

  • "Frivolous projects are getting funded. This is something the Chinese press doesn't like to talk about. But evidence is leaking out that huge sums of money have been squandered on useless and non-productive projects.

  • "The explosion of sweet heart loans from state-owned banks is going to bite China in the back-end. When China issued directives to open up the vaults and lend, lend, lend, it was an open invitation for local big-wigs to drag out their favorite pet projects. The vetting of these of these loans was short and sweet. We've seen in the U.S. how bad loans can take an economy down. China's willingness to go down this road can mean only one thing. Their political leadership and economic elite are even more arrogant than ours.

Andy sounds a positive note

When not writing about China's slide into the abyss, Andy has put together some brilliant
ideas about protecting and growing your wealth in the years ahead. Check out his flagship publication, INCOME.

Good Investing,

Bob Irish
Investment Director
Investor's Daily Edge

We want your feedback! Let us know your thoughts on this article. Email us at Email:

Market Window

Bob Irish - Investment Director
Andy Gordon - Editorial Contributor
Jon Herring - Editorial Director
Ted Peroulakis - Editorial Contributor
Christian Hill - Managing Editor
Dr. Russell McDougal - Editorial Contributor
Steve McDonald - Editorial Contributor
Michael Masterson - Consulting Editor


Home  |  Archives  |  About Us  Privacy Policy Whitelist Us  |  Unsubscribe

To unsubscribe from Investor's Daily Edge and any associated external offers, Click here

To change your email address, Click here

To cancel or for any other subscription issues, write us at:

Investor's Daily Edge
PO Box 7835
Delray Beach, FL 33482

Copyright © 2009 by Fourth Avenue Financial. All rights reserved. The Fourth Avenue Financial unites the stock-picking talents of several analysts and editors. Each of the services is based on individual trading/investment philosophies or vehicles and specific investment approaches.

Fourth Avenue Financials Investor's Daily Edge is intended specifically for mature investors with a strong sense of individual responsibility who want to arbitrage different viewpoints to optimize their personal investment strategy. We reserve the right to remove readers we believe do not meet these criteria from our distribution list without prior notice.

You are welcome to distribute this message, at your discretion, to others who you believe share the values of the Fourth Avenue Financial.

NOTE TO OUR READERS: Fourth Avenue Financial or Early To Rise does not act as an investment advisor or advocate the purchase or sale of any security or investment. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question.

Fourth Avenue Financial expressly forbids its writers from having a financial interest in any security that they recommend to their readers. Furthermore, all other employees and agents of Fourth Avenue Financial and its affiliate companies must wait 24 hours before following an initial recommendation published on the Internet, or 72 hours after a printed publication is mailed.

Email: | phone 800.718.2891

We respect your privacy. You can view our privacy policy here.
© Copyright Early to Rise, LLC., 2009

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.