OIL AND GOLD MOVING……..FINALLY
(August 28, 2015)
The government came in on Monday and saved the collapsing stock market by throwing truckloads of cash to the banks.
They also manipulated the GDP higher to make everyone feel good. So the markets have been going up all week.
BUT nothing has changed. The economy sucks as we have been telling you forever. Something like 93 MILLION people are not working. There is NO stimulus to move the markets higher…..NONE. SO, we feel the stock market will gradually decline over the next several months pending some new QE program or some other magical catalyst that we do not foresee.
If you own stocks, be sure and have sell stops in place in case this thing collapses.
We own gold and energy positions in the Core Portfolio. They have started an upward trend the last few days and maybe, just maybe, we have a bottom in place. If you do not own any of these, you should start buying.
Hooray for Trump. We are so glad that somebody is starting to talk about the horrendous debt load that the US carries. Maybe the big Donald can start to raise awareness among the American people: nobody else is. The current corrupt Socialist Administration has done nothing for almost eight years and radical change is needed.
The “death cross” pattern is spreading fast through the stock market like a bearish virus.
On Friday, the S&P 500 index SPX, +0.06% became the latest victim. The broad-market barometer’s 50-day moving average fell to 2,074.42, according to FactSet, to cross below the 200-day moving average, which slipped to 2,075.39.
The S&P 500’s last death cross appeared on Aug. 12, 2011. It bottomed about six weeks later after falling a further 6.3%. The opposite bullish crossover, known as a “golden cross,” appeared 5 1/2 months later.
BUYING WELLS FARGO CORPORATE BONDS
(Wednesday August 26, 2015)
We have been purchasing Corporate Bonds from Celgene and Aflac. Today we suggest you look at Wells Fargo bonds paying 3.52%. They mature in February 2023. We are actively searching for conservative good quality investments with five to ten year time frames. Unless Wells Fargo goes bankrupt, highly unlikely, you will get a nice income stream for the next eight years. Go to Core Portfolio to see all current holdings.
Long term—– meaning over the next six months, we see declines in the stock market. There is talk of a new Quantitative Easing program which would probably prevent declines, but we do not see the Fed implementing yet another QE program.
We have been actively selling positions. We are still looking at SH which is an inverse etf, basically ‘shorting the market.
CUSIP for Wells Fargo bond: 94974BPJ4
PRH is a baby-bond from Prudential. This is an excellent holding and try to get it under $25.00.
We sold DSL and reduced PFLT.
Barring any new lunacy from the Fed’s such as QE 4, 5, 6 etc, Barring any push to shove money out of helicopters, the top is in. But here’s the catch. Even if they do QE4, and 5, and push money out of helicopters… it won’t last. Yes we might hit a new high for a bit, but it too will fail. ALL ponzi’s fail folks. This one too.
“That explains why there’s so much amazing support for Trump,” added Lessig. “Americans are willing to put up with his outrageous views because they look at this guy and say, Holy crap. Here it is. A politician not beholden to these crony funders. That’s the gift.”
MARKET WEAK–WE ARE SELLING INTO THIS RALLY
(Tuesday August 25: Selling SDIV and EXG. We are in preservation mode. See Core Portfolio. The market will probably drop DOWN to retest the Monday lows. We continue holding the bonds and debt issues found in the Core Portfolio.)
Follow this link to a “must read” article:
(Saturday August 22, 2015)
NEWS!!!! We suggest you subscribe to this.
The Prudent Speculator, a 38-year-old value investing newsletter, is happy to announce the launch of its new complimentary newsletter subscription! This will be a condensed version of the current paid newsletter and will be sent via e-mail once a month.
The paid version of The Prudent Speculator began in 1977 and is the #1 ranked, not adjusted for risk, investment newsletter for the past 20, 25 and 30 years according to The Hulbert Financial Digest*.
We may see a rally next week (head-fake) and you should think about selling any individual stocks that you still own….if and when we see a potential rally.
We have been telling you to place stops that would get you out before we saw the big declines this week.
In the long term view, it is very possible we will see further movement downward in the next few months…this is a slow process so nothing will happen overnite. If it appears that we will have a complete breakdown, SH is a good inverse etf that rises as the market declines.
We are in conservation mode: preserving the money that you have NOW. We are evaluating the bond and debt issues in the Core Portfolio and we may want to sell specific positions depending on what the technical indicators tell us going forward.
People are tossing out the baby with the bath water and even good investments can tumble in sympathy with big market moves.
Having lived through prior crashes, we can tell you about the mental horror that you go through in losing large amounts of money. It is far better to take losses and save what you have.
(Friday August 21, 2015)
Celgene Corporation is a bio company that is primarily engaged in the discovery, development and commercialization of innovative therapies designed to treat cancer and immune-inflammatory related diseases in patients with limited treatment options. We suggest you look at their Corporate Bonds maturing in 2022 and paying 3.5%. This is a nice yield that beats the alternatives out there. The Celgene bonds are a good quality, NOT a junk bond.
The big players in the stock market will try and stabilize stocks today. But there is a high probability that we will see further downside long term…….for months. This market is in trouble.
Trump news: So for the near future at least, Rasmussen Reports intends to track Trump’s race for the White House in a weekly Friday feature we’re calling Trump Change.
Our latest national telephone survey finds that 57% of Likely Republican Voters now think Trump is likely to be the Republican presidential nominee next year, with 25% who say it’s Very Likely. That compares to 27% who felt a Trump nomination was likely two months ago when he formally announced his presidential bid, a finding that included just nine percent (9%) who said it was Very Likely.
(Thursday August 20: Investors are running scared and buying gold. We have owned GGN and you should look at owning gold miners or gold.
Today we are buying an individual corporate bond from AFLAC. Everyone is familiar with AFLAC from the television commercials. They are an insurer with most of their business in Japan. The bond pays 3.4% which is pretty good. The bond matures in June 2023 and we like the short maturities.
It is SO important that you understand this: from streettalklive.com
The Fed is slowly coming to realize that “forward guidance”, “QE” and artificially suppressing interest rates does indeed boost asset prices and creates a burgeoning “wealth gap.” However, since those programs only affect the top 20% of the population that actually has money to invest, it does little to create real prosperity across the broad economy.
(Tuesday August 18: The stock market has been flat-lining sideways for six months. That alone should tell you that there are problems. There is no impetus to move the market up. And if the Fed decides to raise rates (which we believe would be a very stupid move) the markets will most likely decline. So we continue to advise putting in sell stops on individual stocks and etf’s that will get you out if we see significant declines. It is our OPINION that we are setting up for a correction–keep in mind this blog is not involved in trading stocks but we keep giving you our perspective. We did buy PG a while back and got out at a small profit. We were going to fiddle with Wal Mart but they took a hit yesterday so that would have been a mistake. And to make matters worse China has been roiling the markets. (We hear that 13 of the DOW 30 have already corrected 10% down.)
IF ANYTHING you should start looking looking at the inverse etf SH which would go up IF the market tanks. We would NOT buy SH right now but keep it on the radar if you want to get into shorting the market.
As far as the bonds and debt issues that we hold in the Core Portfolio we are holding, for now.
We are not buying or selling anything but we are inclined to sell some positions. At this point we are far more concerned about CONSERVING our money and NOT taking risk in trying to reach for yield.)
This is an amazing admission:
The Federal Reserve is putting some of its post-crisis actions under a magnifying glass and not liking everything it sees.
In a white paper dissecting the U.S. central bank’s actions to stem the financial crisis in 2008 and 2009, Stephen D. Williamson, vice president of the St. Louis Fed, finds fault with three key policy tenets.
Specifically, he believes the zero interest rates in place since 2008 that were designed to spark good inflation actually have resulted in just the opposite. And he believes the “forward guidance” the Fed has used to communicate its intentions has instead been a muddle of broken vows that has served only to confuse investors. Finally, he asserts that quantitative easing, or the monthly debt purchases that swelled the central bank’s balance sheet past the $4.5 trillion mark, have at best a tenuous link to actual economic improvements.
Williamson is quick to acknowledge that then-Chairman Ben Bernanke‘s Fed, through liquidity programs like the Term Auction Facility that injected cash into banks, “helped to assure that the Fed’s Great Depression errors were not repeated.”
(Thursday August 13: We are in the very, very, very early stages of a market crash. People are finally starting to realize that our economy is crap, something we have been telling you for many many months. Investors are starting to get very nervous and that is why they are herding into gold. We continue holding GGN, our gold position, in the Core Portfolio.
It now appears there will be NO Fed rate hike in September–but they are pretty stupid so you never know. Unless we see yet another QE stimulus program to prop up the markets, highly unlikely, we feel stock investors will be hurt badly probably next year.
Just last week we anticipated a rate hike but with this China mess, things changed again. What a fiasco.
The “big boys” are selling stocks and you may want to do the same, or at least put in sell stops.
Here is another item that has everyone concerned:
On Tuesday the 50-day simple moving average for the Dow Jones Industrial Index moved below the 200-day simple moving average. This so-called “death cross” is among the most bearish market signals.
Funny Quote: I sold all my China, Im eating off paper plates.)
From zerohedge.com Wow this is bad
Just as we warned earlier – and Goldman subsequently confirmed – the Q2 “stack’em-high” surge in inventories (which has juiced hype hope that America is back, baby!) has consequences. The Atlanta Fed just released its latest forecast for Q3 GDP growth, lowering it to just 0.7%, citing an inventory drag of -2.2 percentage points. The Fed estimate is now 75% below the street’s consensus!!
(Monday August 10. It is sounding like the Fed is bound and determined (really………. this time) to increase their overnite rate in September. This would not be good for the stock market. As we have repeatedly said, you should be raising cash OR at least have sell stops in place for your stock holdings.
When you own stocks that pay 2 or 3% in yield but they decline 5 or 10% in value, you LOSE. Don’t get caught in that mind-set. Significant declines in stock prices will really hurt your long-term goals.
We are NOT stock traders but we do hold many income positions such as corporate bonds and exchange traded debt. We continue holding all income investments that are listed in the Core Portfolio. You do NOT want to be buying any annuities, utilities, preferred stocks. REITs, muni bonds.)
(August 7. Did Trump jump the shark last nite?
We have been telling you for weeks that you should have sell stops in place for any stocks that you are holding. You could spend 24 hours a day on the net reading articles about this awful economy. And yet the Fed morons are talking about raising rates. This situation in the financial markets is unreal…………………………
Unless you are a buy and hold investor AND think everything will turn out fine, you should be raising cash…quickly.
More from the Web: “As noted earlier in the week, state and local taxes have soared 75%. While this would be no big deal if wages and salaries had risen by 75% in the same time frame, but earnings have barely kept pace with inflation (38% since 2000).”
(August 4. Wow isn’t it amazing how Trump is taking the country by storm.
If you are a short term or day trader, you can make money in these weird markets. But you damn well better have experience and know what ur doing. This blog is not into short term stock trading….it’s just too much work and so time consuming.
We have been buying some short term Corporate Bonds for the personal accounts, but have not suggested anything in the Core Portfolio. There is just simply nothing in the dividend arena that looks good especially in this weak market. We are holding positions and collecting dividends.
Even stock leaders like Apple and Facebook are weak. We still expect a five to ten percent correction in the total stock market SPY…..sell stops should be in place so that you get out automatically if we see declines.
In other words the market isn’t near all-time highs because of the fundamentals of so many great stocks. It’s there from derivatives, QE programs, buy backs, accounting gimmicks, etc.
(August 3: The financial situation is getting more serious by the day. We have three options:
There is no catalyst to drive markets higher.
If the Fed morons raise rates, the consolidation we have seen for months MAY morph into:
the third option which is going from a weakening trend into………..a major correction.
Big institutions are selling stocks on large volumes. You need to take precautionary measures by either selling stock positions or placing sell stops.
Big investors are fleeing stocks.
In a note Tuesday, Jill Carey Hall at Bank of America Merrill Lynch (BAML) wrote that the clients’ net sales of US stocks amounted to $4.1 billion last week, the largest total since January 2008.
(August 1: Stocks continue in this consolidation phase and nobody can tell you if it will break out to the Upside or Downside….but it will eventually. We have been suggesting that you place sell stops for stocks in case the market collapses. Goldman Sachs, Apple, Facebook and IBM are some of the big stocks that will continue downward so beware if you own these. We are smack dab in the middle of the “sell in may and go away period”.
We continue holding the corporate, short term and specialty bonds, and exchange traded debt.)
(July 31: Capital preservation is paramount here. We have been in a consolidation for almost five months and there is NO evident event that will drive markets HIGHER and break out of this stagnant market. We still suggest you place sell stops that will get you out of your positions if the markets tank. We sold PG a few weeks ago at a small profit and yesterday it bombed: just another indication of what can go wrong is this environment. We are not saying you should sell right (unless you have obvious losers) now but do place stops. We ARE selling positions in our personal accounts in an effort to preserve the portfolio…also see Core Portfolio for changes.
(July 30. If the idiots at the Fed raise rates, we are going to see declines. It’s time to fine tune portfolios and GET OUT of positions that are not working. If you do not want to sell right now have stops in that will get you out. Raising cash is probably the prudent thing to do in this weak market. Biotechs are weak, sell. If this market crashes you may want to use SH to short the market….we suggest you get familiar with this easy way to short using an ETF.
The Reuters/Ipsos poll found 25 per cent of GOP voters want to elect a President Trump, resulting in a double-digit advantage over his nearest rival Jeb Bush
The former Florida governor trails with 12 per cent.
For the first time this year, Donald Trump tops a state poll of GOP presidential candidates in Florida.
A St. Pete Polls survey released on Wednesday shows the New York businessman with 26 percent support, with Jeb Bush in second place with 20 percent.
At first glance, the statement did not appear menacing. I was told I could expect to receive a benefit of “about $2,136 a month” upon reaching age 70 — which certainly seems like good news. But immediately I thought of a parallel of President Obama’s infamous Obamacare promise: “If you like your Social Security, you can keep your Social Security.” ADVERTISEMENT Then, as if on cue, I saw an asterisk with the following message: The law governing benefit amounts may change because, by 2033, the payroll taxes collected will be enough to pay only about 77 percent of scheduled benefits.
(July 28. From economiccollapse.com: .…….. you can see that the U.S. national debt was sitting at about 9 trillion dollars when we entered the last recession. Since that time, the debt of the federal government has doubled. We are on the exact same path that Greece has gone down, and what you are looking at below is a recipe for national economic suicide… (July 27 Update: What A MESS:
“Demand for automobile debt in the U.S. is enabling lenders to make longer loans to people with spotty credit, stoking concern that car shoppers are being lulled into debt loads they won’t be able to sustain. Of the subprime vehicle loans bundled into securities, 73 percent now exceed five years, up from 64 percent during the first three months of 2014, according to data from Citigroup Inc. Loans as long as seven years are increasingly being put into more bonds as auto-finance companies and Wall Street banks sell the securities at the fastest pace since 2007.”
(Saturday Update) Technical indicators are telling us that stocks are headed DOWN…at least for the short term. We do not foresee what could change this trend. Many large Companies are showing significant downtrends: IBM, Intel, many others. We have suggested stop loss orders to get you out of stocks if the situation gets worse……….we would not be shocked to see another five or ten percent decline. The ‘sell in May and go away’ axiom would have been good advice this year.
We are still holding all the bond positions in the Core Portfolio as we do NOT see significant rate increases which would hurt bonds. We are also holding the floating rate positions and the other positions that we have listed.)
(Friday Update: We suggest placing sell stops on all stock holdings. You will get out if this stock market tanks. The S&P has dived below the 50 day moving average and we suggest CAUTION. Interest rates will probably come down so we are holding all bonds.) hussmanfunds.com A progressive internal deterioration of the market has been increasingly evident in recent months, and became severe last week. For example, the chart below compares the S&P 500 Index to the same 500 component stocks, but weighted equally rather than by market capitalization. While the difference may not seem significant, it also implies that even an equally-weighted portfolio of S&P 500 stocks, hedged with the S&P 500 index itself, would have lost several percent since mid-April. “It wasn’t raining when Noah built the ark.” – Howard Ruff “You have to think anyway, so why not think big?” Donald Trump (Thursday Update: We suggest raising cash, even if you have to sell losing positions. (We are not selling the bonds and debt issues—rates will probably come down.) It appears they are driving up the banks which drives up the market…..which would allow the big boys to SELL…this is not good. Cynical but that’s what it looks like. So we could see a big pull back. Core Portfolio. PFLT and BKLN are a Buy. July 21, 2015 EXG and TOTL are positions in the Core Portfolio. We are suggesting you ADD to your existing position. You can click on the symbol to see the original recommendations. The yield on TOTL is quite small and would be a good place for cash that you want to start working for you. The 3% yield is certainly better than a CD or Treasury Bill. The first rule in this game is NOT to lose money. The economic numbers coming in are very BAD. A major pullback may be hitting us in the next month. With that in mind we are reducing allocations (by 50%) in numerous positions with the exception of the Corporate bonds and exchange traded funds and bond funds. (We are not expecting an interest rate hike.) We are indicating REDUCE positions on the Core Portfolio page. The dividends that we have received will reduce the pain, but we are still taking losses. The markets ‘want’ to go down. If you have big winners, you should think about placing sell stop orders that will get you out if this market tanks.
From marketwatch.com. Maybe gold has finally hit bottom: we certainly hope so. The world’s top money managers have hated gold bullion for almost as long as anyone’s been asking them. But not anymore. With China wobbling, Europe in turmoil and the price of bullion down to multi-year lows, the long-running gold skeptics running the world’s biggest investment funds have suddenly and dramatically turned on to its appeal. “Gold is undervalued” at around $1,155 an ounce, say a small majority of managers, according to the latest Bank of America Merrill Lynch survey. Bulls outnumber bears by only 1 percentage point, but the improvement shows an astonishing change from the most recent past, when the gold skeptics formed a clear majority. The survey is significant. Bank of America Merrill Lynch spoke to around 150 top investment honchos around the world who manage about $400 billion in assets