You hear it again and again from one market skeptic after another: stocks, off to a blistering start in 2012 and up more than 100% over the past three years, are overbought and it’s time to take some chips off the table.
San Francisco money manager Gary Wollin, an absolute whiz at calling the ups and downs in stock prices over the past five years, vehemently disagrees, insisting “it’s the wrong time to be timid because the best is yet to be.” Read More
“Where are we headed as a global economy?” is a question most of us worry about. My best guess is that over time – in years not months – governments will wither away and the underlying global economy will grow and prosper. How I get there starts with where we are right now. And right now, there are enormous headwinds facing us. The headwinds all have a common theme however. Read More
The global media continues to unblinkingly report US government statistics that jobs and wages are in recovery. However, maybe reality is beginning to sink in. The Wall Street Journal reporter Jon Hilsenrath, the unofficial Federal Reserve mouthpiece, this past Monday wondered in print: “Something about the US economy is not adding up….How can an economy that is growing so slowly produce such big declines in unemployment.” Read More
As soon as the Fed stops flooding the markets with liquidity, or when investors recognize that the emperor is naked, the Dow Jones Industrial Average is poised to plunge to about 6,000 from 13,000 today. When the drop occurs I have no idea, but unless incomes again start growing at more than 5% a year and since a 5%+ growth rate is unlikely anytime soon, stocks will plunge when the Feds fix stops. Why Dow 6,000 for a bottom estimate? Historically stock prices sold at a 10 PE when income growth was 3% or less and with the Dow at 13,000 the PE is 23 today using Robert Shillers 10 year earnings PE… Read More
Don’t get suckered! There are times when gold can turn into fool’s gold. This could be one of those times. In other words, gold stands out as an exciting investment for the long run, but looms as a potential dog of an investment for the short run.
Those essentially are the cautionary suggestions from a couple of outspoken and generally buoyant long-time gold bulls. More specifically, they’re saying if you’re tempted to take a flier on the precious metal in the hopes of buying it on the cheap after its wicked $130-an-ounce decline over five days that sent it skidding to around $1,660, your timing could be for the birds… Read More
The stock markets are being rigged by the Federal Reserve and European Central Bank and what is more, just about everybody knows that. My CNBC buddy Bob Pisani said today that kicking the can down the road, a euphemism for the rigged economies both here and in Europe, is an effective policy tool because it has worked, so far… Read More
The Biderman Market Theory has two key distinctions and both of them are bullish for US stocks over the near term. The first distinction is that all markets have two types of participants, the house and the players, and the house always has an advantage over the players. In the stock market the house are the public companies. The house, as evidenced by the 3000 largest US public companies, in February for the first time since we started tracking monthly float six months ago shrank the number of shares outstanding at a 1.3% annual rate, compared with a 1.3% share growth rate in January and a 3% annual growth rate in the number of shares last October. Therefore, the house is bullish… Read More
Sol Erdman is the founder and president of the Center for Collaborative Democracy (CCD) and co-author of The Cure for Our Broken Political Process: How We Can Get Our Politicians to Resolve the Issues Tearing Our Country Apart (Potomac Books, 2008)… Read More