Written: Wednesday, Dec 02, 2009  (U.S. 8am EST)

IN MY OPINION:

Back in the 1970’s when the stock market was only trading about 40 million shares a day, Fundamental Analysis was KING !  Read the Earnings Report and eek out companies that were solid, and showed potential growth for the future.

Today, when 2 or 3 BILLION shares are traded each day – from all over the world – Fundamental Analysis is squat ! (World-wide, there is 50 times more stock traded today – and FASTER - than back in the 1970’s.)

The reason?  Computers. Personal computers !

Everyone has a computer, a computer program, and an online broker.  Decisions are made instantaneously for investors – without all the sweat and tears. When I started, I first used a slide rule to check out percentages, and later, advanced up to a Texas Instruments’ hand-held calculator.

Charting was tedious and done by hand – and it took hours to handle just 10 or 15 stocks. 

Today, I can watch 12,000 stocks - in the flash of an eye – and place an order in 5 seconds!

Fundamental Analysis is still being used by institutions and mutual funds – because they, basically, are very long term investors. They look for earnings and growth. 

But, the average investor these days, doesn’t have that expertise to decipher Earnings Reports – and charting is sooooo much easier for them. A picture is worth a thousand words.

There are so many chartists now in the world that THEY have become the dominating force to deal with. Regardless of what earnings might be for a company, if the chartists begin a “run” on the stock, the stock will rise – and rise – and rise, even further. Chartists – for better or for worse – have taken over the stock market.

When a stock hits a TREND LINE, chartists step in and buy. When a stock makes a TRIPLE TOP, and breaks out on the upside, chartists step in ande buy. (And, conversely, on the way down.)

It’s no longer any good to anticipate the market, you MUST “follow” the chartists – even if it means getting in a little late. Chartists will push the market higher and higher, or lower and lower.

Fundamental Analysis, with its Fair Value, is only good enough to tell you what season the stock is in – like, summer or winter.  Fundamental Analysis no longer can tell you when to buy, or more specifically, when to sell.

Chartists are now KING !  And, it’s best to “follow” the market, rather than try to lead it.

Stay Tuned !

Jack

P.S.  “Follow” my charts at http://www.fburg-online.com  – and stay a half-step ahead of the crowd !

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Written: Tuesday, Dec 01, 2009  (U.S. 11pm EST)

IN MY OPINION:

STIMULUS – helps everyone.

JOBS – helps everyone. 

TAX CUTS – helps the rich, while “hindering” small business.

I have a friend that owns a print and copy shop. In addition to the normal flow of traffic in his shop, he does a lot of copying of blueprints and plats for builders and developers.

Here is the problem HE has with taking a TAX CUT for his small business, (and which I agree with, wholeheartedly).

He has 7 people working for him. With a TAX CUT, he might be able to add another person or two to his staff.  Now, what are they going to do in his shop?

The DEMAND for his services hasn’t gone up.

Those extra 2 people will be sitting around all day - while he pays more out in unemployment insurance  for them, makes payments for their social security, and adds them to his medical plan. Then, if they are out sick, he still has to pay them. Plus, they are accumulating vacation time.

Remember, he has NO MORE DEMAND for his services.  DEMAND is static. So, his payroll is greater, even though there isn’t any more business coming through the front door. How is this helping the economy?

Yet, the OPPOSITION PARTY of this country, led by the vilifying conservative talk show hosts, say that ONLY small businesses can CREATE jobs and put people back to work. OK !  Then what?  If there is NO DEMAND for this company’s services, he will be hiring people that DO NOTHING in his shop. Having people sitting around in his shop IS NOT good for business or morale.

The other alternative is to give himself a raise with the TAX CUT MONEY. Well, why not ? 

WHAT IS THIS OPPOSITION PARTY THINKING?

If my friend creates and hires more people, how will THAT create MORE DEMAND for his services? And, he is not alone, as a small business owner.

How can a barber shop hire more barbers if only the same amount of people are coming in ?  How will a car dealership, adding more salesmen,  create more sales and improve the bottom line for his company – without DEMAND?

A restaurant, adding more cooks and servers, won’t bring in more people to eat.

These are all SMALL BUSINESSES – and receiving a TAX CUT and creating jobs ISN”T the solution to their problem. CREATING DEMAND for their services is.

Florists aren’t sending out more flowers. Why would they hire more help? Or, sandwich shops? Or, home repair companies?  And, certainly, Wal-Mart, getting a Tax Cut, isn’t going to be hiring more people, UNLESS there is more DEMAND.  Nor, will chain drug stores, or grocery stores.

DEMAND is the ONLY REASON for hiring – not TAX CUTS.

Without DEMAND, small businesses will fail – even though they created more jobs. Isn’t that wonderful !

Economics 101 says PUT MONEY in the hands of the consumers, and they will spend it. Small business owners AND big business owners will only put the TAX CUT MONEY in their pockets, by giving themselves higher salaries and increased bonuses.

TAX CUTS do not create DEMAND.  (And, as an OPPOSITION Party, they should know that. I’m worried that they don’t.)

But, DEMAND is what creates JOBs and hiring, not TAX CUTS.

The way to CREATE JOBS is to create more DEMAND – by having people buy cars, going to restraurants, sending flowers, and buying houses, so developers can get their blueprints copied at my friend’s copy shop. And, the way they do that is by having MORE MONEY in their hands, and NOT in the store owners’ pocket.

My friend – the small business owner – is absolutely right !   You don’t create DEMAND  with TAX CUTS.  Hiring without demand will only cost him more money.

Ronald Reagan gave a tax cut to the rich company executives the moment he came into the White House, and unemployment for average citizens STILL went up over 10.4% during the next three years.  Business owners POCKETED the money – and didn’t create jobs – BECAUSE there was no DEMAND.

When DEMAND increases, business owners will begin hiring again – and not before !

The OPPOSITION Party, as well as those absurd-sounding conservative talk show hosts,  are ALL advocating TAX CUTS for the rich. Well, of course. they are. Insurance companies, doctors, hospitals, Wall Street, and Bankers. Everything for the rich, and nothing for the little guy.

A TAX CUT – without DEMAND – will sink thousands and thousands of small businesses.

How will giving them a TAX CUT create more jobs – without DEMAND ? The owners will pocket the money. That’s all, like they did before in the 1980’s.

The key to keeping the stock market heading upward, is to make the average citizen feel good about his job, his security, and his retirement – so he has money left over to begin investing in the stock market again.  If business owners POCKET the monies from a TAX CUT, none of that is possible.

Keep America FREE from self-interest individuals and ridiculous radio blow-hards - and keep the STIMULUS packages coming !! That’s the ONLY way to CREATE DEMAND for products and services.

 Stay Tuned !

Jack

P.S.  A reminder – this is  just my opinion ! But, if creating jobs is sooooo easy, why isn’t the OPPOSITION Party doing it freely, instead of asking the Federal Government for a handout??? Do the rich really need that much incentive that they can’t do it ALONE ? I thought they were PATRIOTS of this country !  ( In 80 years, 4 Republican Administrations have led this country into 4 SEVERE MARKET CRASHES.  That should PROVE they know nothing about restoring the economy of this great country!)

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Written: Saturday, Nov 28, 2009  (U.S. 8pm EST)

IN MY OPINION:

In Dubai, (that magical kingdom in the Middle East), investors are worried that all the king’s horses and all the king’s men won’t be able to put Humpty back together.  If you haven’t heard, it is rumored that a government-run entity may be going into DEFAULT.

With all that oil revenue and gold receipts, how could this happen to them?

Even the rich make mistakes. Their expectations were obviously too high.

People of all kinds make two vital financial errors:  1) getting caught up in the hype, and 2) and miscalculating VALUE.

Yes, things do get over-priced and over-VALUED. In my opinion, according to MY calculations, these stock markets have moved into the “over-valued” range since August – and yet, there are investors who just keep on buying, regardless. Maybe, even some Dubai residents.

Investors miscalculated VALUE in 2001 and again, in 2007 – and now, in November 2009.  No matter what anybody says, you can’t stop them, They just buy, buy, buy. The problem is that there are fewer and few of them, on each rally. Eventually, NO MORE BUYERS.

But, WHEN, WHEN, WHEN ?  Again, I say, I wish I knew. Buyers continue to come out of the woodwork – and until they stop, the market will continue to stride upward and forward. According to the charts, overall volume in the market has been declining rapidly, these last 2 months.

And, selling (on the rise), has been increasing in many sectors of the market.

Whoever is buying is certainly not paying attention to VALUE.  Would you pay $35,000 for a car that the Blue Book says is only worth $21,000?  That’s what investors are doing in the market – paying $58 for a stock that is only worth $42.

If you have the patience, you should wait until the price for a $42 stock is trading at a discount, in the $32-$35 range. That’s a long ways from $58, but smart money is counting on that.

If you can’t wait – and your patience is wearing thin, and you’re caught up in the hype – just remember those folks in Dubai. They couldn’t wait for the recovery, either.  If rich folks can’t make any money, then, who can?

Stay Tuned !

Jack

P.S. Isn’t Donald Trump over there, too ?  His Trump Entertainment, if my memory serves me right, dropped from $22/share to 22 cents, about a year and a half ago. I think he thought that Dubai was another Garden in Paradise. But, that’s just my opinion !

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Written: Tuesday, Nov 24, 2009  (U.S. 11am EST)

IN MY OPINION:

The answer for me, is … WHAT DOES IT MATTER?

The changes in our environment are so subtle that we hardly notice any difference, from day to day. Fish probably don’t either.

It’s a lot like gaining weight – a 1/4 lb here, and a 1/2 lb there, and before you know it, you’re 20 lbs bloated – much heavier than before. BUT, as time goes by, the “new” weight becomes the norm – and life continues on.

Look around you !  Most people aren’t interested in losing weight. They simply adapt to their new environment. The economy is like that – it just keeps ballooning up, and people adapt.

In 1950, I got a 35-cent raise and it didn’t affect my social standing. A few years later, I got another 40-cent raise, and I still didn’t notice any change.

By 1970, I was getting dollar raises, but the cost of movies had jumped from 60-cents in 1950 to $2.50 in 1970.

Subtle changes in our economic environoment are much like the subtle saline changes in the water that fish swim in. Fish adapt, and so do we.

In 1950, minimum wage was about 40-cents an hour. Today, it’s about $7.00/hr. Yet, none of us have felt the change.  When the mechanic down the street gets a raise, a secretary in another building will also get her raise – everybody moving up the scale, a little at a time.

The national debt in 1950 was only several hundred million dollars, whereas today it’s about 2 trillion dollars.  But, we also have increased population, from 200 million in 1969 to 307 million today.  Subtle changes, but over 40 years, it seems like a lot.

As a society, we could be walking around in a transparent peanutbutter goo, (and not know it), but, as long as we existed, it really doesn’t matter about what our environment is, and the fishes probably don’t care either.

It’s what happens to us when that environment is drastically changed, that matters. A fish can’t live without water, and we can’t live without air. 

I do understand what the reader was driving at though.

Is our society actively concerned about our economic and national debt, as an environment, and as things are going right now?

If you compare it to 1950, as some critics do, there are big changes. But, we don’t live in 1950 anymore.

The fact is that the national debt is NOT too high. The problem is that the word “trillion” sounds high right now, to the average person - when it’s not, when compared to everything else around us.

Twenty years ago, we were talking about the economy in “billions”, and we thought that was high.  When your father was a kid, $100,000 was a fortune. Today, it’s average salary for somebody in the technical field.

Opponents of healthcare talk about a “trillion” dollar cost. Somehow, they make you think that’s a yearly cost, when, in reality, it’s over 10 YEARS. It’s only $82 billion/year – a huge difference.

By 2030, we will be reaching 425 million people – still more people, and still more tax money. Your taxes won’t be increasing.

If I said that you’d be spending $400,000 on a car over the next 10 years, you probably wouldn’t buy one today – even though today’s cost would be a fraction of that. Healthcare is the same thing. Try talking about healthcare in one-year increments, instead of 10 years.

A certain banking company recently gave out – in BONUSES – 34 billion dollars to just a few employees. That’s about half of what the healthcare will cost FOR THE ENTIRE COUNTRY – for a year. And, those bonuses came from tax-payer monies, yet nobody complains. WHY?

And, no doubt that same bank will be giving out more bonuses next year, and the year after that.

What’s reasonable, and what’s not? Society doesn’t see the water changing either, when it moves subtly. It’s only muddied up by outrageious lies and claims.

As far as the national debt is concerned, we are NOT indebted to China for our debt, either. They are merely buying our Treasuries at auction price, just like any other customer. If they didn’t buy the bonds, other countries would. The U.S. has never had trouble selling bonds.

In addition, the bonds DO NOT all come due all at one time. They are issued monthly, and they will come due monthly- 20 years from now – on a monthly basis. At that time, our national debt will not be a trillion dollars, but 20 trillion. Everything goes up, including salaries of government workers, road construction costs on the Interstates, NASA, FAA, military pay, guns and weapon costs, airplanes, and everything else that the government buys.

Private industry salaries also go up, as everybody else’s salary goes up, including unions, and teachers, and farmers. When your salary goes up, you pay out more for bread, coffee, and more tax dollars – but your environment stays the same. Speed limits don’t change just because you got an increase in salary.

If the cost didn’t go up for airplanes, Boeing couldn’t give raises to their engineers and workers to pay for the higher priced cars that General Motors was selling. The FBI gets raises, as well as members of Congress. Everybody, as a group in Society, moves up – except there are more people paying the same taxes as you. Hence, more money is raised – to pay for the same services as before.

AND, you will get a raise, believe it or not - BECAUSE they all did, too.

Count the number of raises you’ve had in the last 10 years, and then compare your salary of 1995 to today. A subtle change from one year to the next, but a huge difference between decades.

Yet, you don’t see any difference in your standard of living, WHY? Because everything is relative, whether in society, or in the water. I live about as comfortably as my father did – no better, but no worse, either.

The national debt in 1950 was lower than in 1970, than in 1990, and 2010 will be lower than the debt will be in 2020. It’s all relative to income and increased population – and everything moves subtly.

Society doesn’t see the water or its environment. Everything goes up in price, food, cars, clothing, airline tickets, and golf carts. It is a gradual change – but society’s environment is constantly changing, though you don’t feel it from Tuesday to Thursday.

When I was a kid, I paid 28-cents/gal for gasoline. Last year, I paid over $4,00/gal. But, I paid it, and continued to drive my car. We all did. Yet, our salaries were about 5 times higher.

So, really, nothing appears to change.

The problem comes when you have a catastrophic change, like the housing market bust, and stock market CRASH of 2008.

If a dam breaks in a river or in our economy, the fish and society  are changed forever.

When our economy was crashing in 2008, bordering on a Great Depression, the answer was, we had no choice but to make some changes, and to try to rectify previous mistakes as quickly as possible.

Like the firemen in California with wild fires, any President (no matter who is in power), has only a few limited options, in order to contain the fire.

For every thousand opinions on what and how to achieve that change, we really have only one voice – that must work together – that of our Congress and our President. If the firemen on the California hills, working those wild fires, all went in different directions with various opinions, the wild fires would overtake everybody.

The same holds true with a bad economy- growing worse. The President can only use money, like a hose squirting water, to help contain his fire, as quickly as possible.

There are those who may disagree with the methods, but doing nothing except arguing over hoses, only helps the fire grow worse.

In 2007-2008, our economy was much like a California wild fire – burning everything in sight. For the fire, there are only two courses of action. 1) Let the fire continue burning, until there are no more trees or houses left, no matter what the damage, or 2) try to pour some water on it, and limit its destruction.

In the wake, some houses will get burned and some lives will be changed forever.

The President is tossing some water on this economic fire – and that’s about it – because he doesn’t have much else to work with – or time. Like the California wild fires, the President doesn’t have a magic wand with which to cause rain. He uses what he has available - money. And, shore up the banking system, first.

Without a credible banking system, those of us not involved and not caught in foreclosure would also be out on the street, eventually, as well.

Opponents say lowering taxes will increase jobs. Oh yeah? How? By giving added incentives to the corrupt foxes that CAUSED and ignited this havoc fire in the first place?  And, if jobs CAN BE created, WHY aren’t they creating them now, immediately?  As a PATRIOTIC service to the country?  Why do they need extra money in their own personal pockets to do it first?

If jobs can be created, create them NOW ! What’s stopping them?

If you give tax breaks to companies, the first thing to happen, is that the owners will increase their own salaries, just to be safe, as a protection, INSTEAD of hirng new employees. 

And, secondly, tax breaks, don’t, in reality, provide that much money for new employees, anyhow.

Think about it! If the government lowered your taxes by 10%, how much additional money would you have? Not much. You couldn’t hire somebody to do your lawn work with it. You’d sock it away, as a protection. Companies are no different. It’s all in the rhetoric.

Notice, they NEVER say how a tax reduction would help create new jobs – because they don’t know. They want the money in their pocket first.

I was there when Reagan was in office. A tax reduction didn’t help Reagan when he was President. His unemployment figures – 3 YEARS AFTER HE WAS IN OFFICE –  skyrocketerd and reached above 10.4% - AFTER his tax reduction.

All the monies from the tax reduction went into CEO”’s and managers’ pockets. They took raises and bonuses first, and didn’t do any hiring for 3 YEARS !!!

How is THAT a solution to the problem of creating jobs – to help the unemployed? The opposition can’t answer that without looking silly.

Obama has been in office for less than a year – and his options are limited, especially from an unruly opposition, that WANTS HIM TO FAIL – for their own special interests, instead of helping our Society.

Their actions are not very patriotic or American. They should try to help fix and contain the wild fire – and NOT CUT THE HOSES of the firemen on the front lines. They can be politcal partisans at a later time, when the results are in. Just not now.

But, the real question is, did society ALLOW this environment to change in the first place, or ALLOW this disaster, to happen?

My answer is NO. Society never “allows” anything like this to happen. Why would they? Society is always led into the damnation of hell by GREEDY MEN and GREEDY CEO’s.  MEN create our economic problems, not society.  But society, like the homes in California, are caught up in the damage.

In this case, certain MEN (and women) BANKERS solely caused this fiasco. Not the government, and certainly not society – no matter what the opposition says.

GREEDY MEN, seeking higher salaries and bonuses and more wealth, sidestepped common sense rules in business, and took HIGHER RISKS than necessary and took advantage of society whereever they could. 

In this latest episode, they controlled the housing market, packaged it up for sale, knowing that many of the mortgages would go into DEFAULT - but DID IT ANYWAYS, because they were selling the packages off to Europe to some other buyer.

VARIABLE RATE debt on the mortgages is the sole cause of this problem – and certain BANKERS were aware of the sleight-of-hand, but blamed society, anyways.

Certain bankers, like the cunning SHARKS that they are, sold VARIABLE RATE mortages with extremely low initial payments, just to get buyers into the houses – and they took HUGE BONUSES. As an added incentive, they ran their stock prices up so they could cash in their “options” contracts, for their efforts.

They acquire options from the company at no cost, or at very low cost – and convert those options to stock when the price is at its peak. Then, they sell out, for handsome profits – sometimes in the hundreds of millions of dollars.  SHARKS !!!

For the home buyer, when interest rates went up, monthly payments went through the roof, and “society” couldn’t handle it. In my opinion, it’s as close to a SWINDLE as you can get – at least a moral swindle, if not a legal swindle.

TODAY, the BANKERS claim that it should have been “BUYER BEWARE” when the novice, first-time buyers signed the mortgage papers. Personally, I have bought and sold several houses, in my lifetime, and the mortgage papers are a foot high – and require a Harvard lawyer to understand them fully.

Society trusted bankers – and yes, that was OUR MISTAKE. That will never happen again. Banks have lost whatever loyalty and trust they attained over the past 200 years – because of GREED.

Now, did society see this happening? No. It was like a dam bursting in the river, to the fish. It was because VARIABLE RATE debt has never been such a BIG PROBLEM before. The new homeowner was sucked in, and eventually lost their home when rates violently increased well beyond whatever they were told their payments would be. 

Foreclosure still looms for many homeowners.

Could society see “the water” around them growing cloudy? No. It happened too fast, and what could they do with their houses anyways? Sell them off to another unsuspecting buyer?

Society couldn’t see the eruption coming, no more than you can tell what going on inside your car’s transmission today. You have to trust the mechanic that he isn’t screwing you.

Some BANKERS literally screwed the buying public.

Recently, a major bank CEO addressed a large college group and tried to deflect responsibility from himself to the government. He set out to blame the Federal Reserve. That’s like blaming the California firemen for not getting to the wild fire in time.

How dare he !!!  And, yet, he remains as CEO.

But, here’s the resolution.  For every ACTION, there is a REACTION. In California, fires rage, and firemen REACT by pouring water on the forest fire. When a stock rises too high, somebody REACTS and starts a selloff.

Eventually, gold will sell off, too.

When Bankers ACTED against the public’s interest, the REACTION was foreclosure – plain and simple – to bring the bankers back to reality.  ACTION and REACTION.

And, while society got slammed, bankers didn’t necessarily get what they deserved. They are STILL drawing large salaries and HUGE BONUSES.

Society will endure, though many will have to readjust their environment, and learn to read the fine print a little harder, next time.

HOWEVER, have bankers learned their lesson? HELL NO !!

Check your “new” Credit Card offers.  They are all going with VARIABLE RATE debts.  VARIABLE RATE !!!

That means, that when interest rates go up, (in the future), your Credit Card rate is VARIABLE and will go up, too – substantially! It can automatically climb to OVER 20%, as the Prime Rate climbs upward. Some rates may reach 30%.

Today, introductory rates may seem cheap, but like the housing market fiasco, credit cards are NEXT shark pit!!! 

At a 20% interest rate, your credit card debt will DOUBLE in a little over 3 years.  If you owe $10,000 and pay minimum, you’ll be owing almost $20,000 in 5 years. 

CERTAIN BANKERS ARE DOING IT TO YOU AGAIN – but on a much larger scale this time, since almost everybody carries multiple credit cards. SHARKS are circling bodies, as we speak.

Society isn’t doing it to themselves. Society isn’t changing the environment. CERTAIN BANKERS and CREDIT CARD companies are doing it to Society – again !

WHY? For GREED !!! And, because they can. Because there is no government interaction or regulation to prevent them from doing it.

That’s why government is important. Nobody likes to see more regulation than necessary - but eventually, VARIABLE RATES should be banned and outlawed permanently. And, for the sake of Society, government will have to do it.

Hopefully, a few bankers should go to jail, as well – on moral grounds, if for nothing else.

What the housing market just did to us, just last year, the credit card industry will be doing in 5 years – as more and more people default on their cards.

And, those who don’t default will be paying much higher rates because the credit cards company’s excuse for raising rates on good customers is, “we need to raise rates in order to make a PROFIT ! “

So, good customers will be paying for bad customers – when it is the credit card companies who developed the bad customers, in the first place. They get rewarded for bad business decisions.

Should Society have seen the “water” change? Not necessarily. We tend to trust our business leaders – whatever the personal cost to us. That’s been a HUGE MISTAKE.

Banks and credit card companies can not longer be trusted.

In that regard, society’s environment will change over time. But, as a fish can’t see the water around him, society can’t see the credit card moral FRAUD being perpetrated against it, either.

GREED and FEAR – two influences on society. That’s something fish don’t have to worry about, and with luck, you won’t either.

Society moves by Consensus, whether in political elections, stock prices, or federal regulation. When business ACTS and enough people get financially hurt, the government must REACT for the benefit of Society.  That’s what governments are for, regardless of what special interest groups (and their Senators) say.

Government’s job is to protect the little guy.

We’re seeing it in Healthcare, and hopefully, one day, we’ll see it with VARIABLE RATES.

Now, speaking of Consensus -

In general, I like companies that move by CONSENSUS of opinion – that is, a large number of investors, all having the same thought about the company.

And, when that CONSENSUS is strong and moves in a SINGLE direction, whether UP or DOWN – you could be 100% right – simply by following their course of action ! 

If not, you could be 100% wrong, in trying to move against the herd – and reacting in the wrong way. 

To find how investors’ minds are changing, and where the CONSENUS is taking them next, goto the website at  http://www.fburg-online.com and sign up today for a TRIAL run. You won’t be disappointed! 

Knowing when the crowd is about to change - is just as important as knowing when they are NOT going to change.

Just remember – NOTHING is ever guaranteed. Don’t be a fish out of water. Know the environment around you. Don’t believe all those wonderful deals. And don’t get “hooked” by either a bad banker or a credit card company, dangling a sweet lure of a deal in front of you.

They are the fishermen enjoying HUGE BONUSES for their efforts. You are merely their lunch!

Stay Tuned !

Jack

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Written: Saturday, Nov 21, 2009  (U.S. 6am EST)

IN MY OPINION:

Just like a nagging mother-in-law, CRITICS are a way of life for us analysts. We simply expect our “critics” to find fault with everything we do – just like mothers-in-laws do, and just like the Republicans enjoy complaining about Obama.

It’s all part of any ADVOCACY program. In politics or the stock market, criticism only strengthens our views and commitment.

Critics constantly look for failure BECAUSE that’s what they do, naturally. They pounce –  when they don’t have any sure-fire answer themselves.  It’s much easier to criticize somebody else rather than to come up with an original opinion of their own.

We’ve seeing that in politics, and I see that all the time with the stock market. CRITICS don’t have any view themselves, so they blast somebody else’s.

I get comments all the time about market direction – and HOW WRONG I AM !  But, I just smile – and strengthen my resolve.

The problem with their critique is that they don’t know which time period or which SECTOR of the market we’re talking about. They seem to think there is just ONE TIME-FRAME for everything and everybody.  They are WRONG !

We all know it’s winter, and in some areas of the country, it snowed yesterday. BUT, in my area, the sun hit 75 degrees – and NO SNOW. It all depends on the SECTOR you’re talking about – when discussing the weather OR the stock market.

The stock market IS NOT a single entity. It is made up of 12,000 individual companies – all moving at different prices, in different directions, during different time-frames, and at the end of the day, you’re hearing ONE TINY consensus “average” of those 12,000 companies.

That’s like saying that Bismarck, North Dakota determines the weather report for Florida and California. See the silliness?

Likewise, time periods for the market can be as little as 10-minute intervals or 30-minute intervals, or, hourly, daily, weekly, and even monthly. Each time-frame generates its own buy and sell signals – and they need not be coincidently the same.

At some point in time, the market will be going up, and during other intervals, the market will be going down – in a general way of speaking, because as we all know, the market changes course every hour of every day of every month.

It depends on the time-frame you’re speaking about. So, yes, if y0u’re speaking of a daily movement, while I’m looking at the weekly, we may be in disagreement.

BUT, am i WRONG? Not according to MY calculations.

With MILLIONS of investors, all across the globe, each working the market in a different time-frame – from day traders to long-term institutional investors - there is bound to be some diverse views for buying and selling the market, and individual stocks.

The KEY is to concentrate on the view and time-frame that serves your purpose best, and not compare it to somebody else’s view or time-frame.

For me, there are 3 distinct time-frames :  Short-term, Intermediate, and Long-Term.

Short term is for hourly and day traders. Intermediate term are for 3 to 6 week intervals, while Long Term are generally, in my opinion, 6 months to a year. Others may disagree, but so what? These are MY time-frames.

I enjoy my so-called Intermediate Term investing plan because it doesn’t require as much work, anxiety, or pressure as the Short Term, and there are fewer trades and commission costs.

Are there false starts and retreats. Of course. No plan is perfect. We’re dealing with a million different minds, around the world, all trying to outfox everyone else – and make a profit in the meantime.

And yes, inbetween the upward trend days, there are always a few “down days”, as fellow investors change their minds, or take their profits. As long as there are more UP days than Down days, I’m happy with the results.

Soooooo, while Obama and I suffer from the same unwholesome and desperate condition of CRITICS – those hoping to see each of us FAIL -

————- our resolve will speak for itself, over the long term.

If I did nothing during this past year to solve any of the perplexing and uncertainty that stands in the way of a perfect market, I would still be criticized severely for remaining mute. 

And, if Obama were to remain mute, he’d still have his critics, as well.

Taking a position strenghtens the will of our ADVOCATES, but also brings out the undefinable kooky CRITICS from under the rug – whether in politics, or just with the market.

It goes with the territory!

I always check the Fundamentals and the Technicals before I invest.

FUNDAMENTAL analysis tells me about the company – whether it’s strong and moving in the right direction to become more profitable.

TECHNICAL analysis tells me about its investors – and whether they are committing their valuable dollars to support the Fundamental analysis – or not.

Fundamentals change every 3 months (with Earnings Reports), while Technicals can change every day.

Most investors don’t understand that. They think “analysis” is etched FOREVER in stone, and never changes. It isn’t. It pays to stay current in both. 

In the market, Factors that control analysis change, and, therefore, OPINIONS about companies also change – as various investors ALTER their thinking and their positions.

Those changes of investor opinions are “chartable“.

You can make money in the market without watching either, but, when I decide to have a picnic tomorrow, I like to check the weather forecast in the paper and on television to see if the conditions for the picnic are favorable, or not. I don’t like to leave things to “chance”.

In the stock market, I don’t leave things to chance, either.

I always check the Fundamentals first, and THEN the charts – to see if investors believe the Fundamentals, or if they are taking some other action.

I, initally, select companies based on their Fundamental analysis – good companies with a good future – BUT, I invest in companies, based on what OTHER INVESTORS are telling me they are doing with their monies.

When I see changes in the Technical charts, I see a change in investor attitudes and their decisions.

In general, I like companies that move by CONSENSUS of opinion – a large number of investors, all having the same thought about the company.

And, when that CONSENSUS is strong and moves in a SINGLE direction, whether UP or DOWN – you could be 100% right – simply by following their course ! 

If not, you could be 100% wrong, in trying to move against the herd. 

To find how investors’ minds are changing, and where the CONSENUS is taking them next, goto the website at  http://www.fburg-online.com and sign up today for a TRIAL run. You won’t be disappointed! 

Knowing when the crowd is about to change is just as important as knowing when they are NOT going to change.

Just remember – NOTHING is ever guaranteed. Investors are never fickle where their money is concerned – but CRITICS are always full of HOT AIR, and usually wrong.

Stay Tuned !

Jack

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Written: Friday, Nov 20, 2009  (U.S. 6am EST)

IN MY OPINION:

Greed causes people to buy stock and push prices higher. For whatever reason, whether earnings are better, or the charts look good, investors will find a reason to BUY.  They are greedy, and want to get into the market before anybody else gets in.

Fear, on the other hand, causes people to sell their stock, and thereby, push the stock market down – usually more quickly, simply because they fear losing whatever profits they already have locked in.

The problem is, that, this year, there is neither greed nor fear, nor urgency in the market. It is stoic and unemotional with an upward bias - exhibiting an indifference to either good news or bad news. 

Several things are going on this year which are not readily accountable for the market to be acting the way it is.

For one thing, the time-table for the market is completely off schedule.  The sudden drop and turnaround last March caught many of the big investors completely by surprise. March is not thought of as a rallying month.

And, the mid-summer sell-off never came. Yes, we had several small pullbacks, but not the heavy-handed sell-off that was expected.

Finally, the tax-selling season of October never really happened either, - nor the Thanksgiving week sell-off and rally.

Further evidence that something has gone awry in the market this year, is that there is NO INSIDER activity going on, other than selling. THAT is highly unusual.

Insiders are usually the first to jump onto the market bandwagon – simply because they have advanced knowledge about next year’s growth and earnings for their own companies. This year, even though the market appears strong, Insiders are exiting, not entering, the market.

In almost every case, Insiders have been selling throughout this long-extented rally – and that is troublesome from a foundational standpoint.

Added to that, is the fact that “on-balance”, many more institutions have been SELLERS all the way through this rally - dumping more and more shares. That adds to the mystery. If reports are correct, there has been minimal buying by institutions, in all categories.

By now, stocks should have been in retreat, getting ready for a December rally, pouring over into January. That, obviously, hasn’t happened.

Instead, the market has been moving ahead – marginally – almost every day – as if controlled by some unknown alien force.  Nobody I’ve talked to, can understand it. Markets don’t operate this way without the professionals being in control. And, at this point, they aren’t.

On one hand, you need the Insiders and mutual funds buying close to the bottom – not selling.

And, then you need the Insiders and mutual funds selling near the top – not buying.

The intriguing thing is that the general public doesn’t have the volume necessary to push this market forward. So, the question is, then, who does?

95% of day traders lose money – and their volume isn’t enough to propel this market forward. And, if it were, they would be making money, not losing it.

Foreign investors? Hardly, because their markets are undergoing the same process.

Foreign governments? Who knows? If so, who?

Bin Laden? Maybe this is a new tactic to demoralize everyone when another crash in the market begins. Who knows?

Somebody, somewhere, has derailed this market from its normal and usually ordinary considered course.  And, that’s troubling, when the professionals can’t figure it out.

There’s a lot of money sitting on the sidelines – Insiders and institutions, alike, en masse - all waiting for the same signal. There’s a lot of money sitting on the sidelines, waiting for the tax-selling decline. Where is it ? The year is coming to an end, and we haven’t seen that massive sell-off yet.

And, there are a lot of windbags out there who profess to have the answer, but they don’t. They are only guessing, which is what windbags do.

This market is truly “different” this time than any other market that went before.  Volume has been waning, which shows there is less and less interest in continued buying.

Perhaps it’s the Fed holding interest rates at such a low level that is dissuading professional investors from getting into the water.

In any case, this market has recovered remarkably, considering where we were in 2008 when the economy was in a shambles. But, it has done it without any Insiders or institutional money, at large.

Things DO change !  And, perhaps, this is the newest change we’ve seen in decades.

In general, stocks move by CONSENSUS of opinion. (unless Buffett interferes)

And, when CONSENSUS moves in a SINGLE direction, you could be 100% right by following their course ! 

If you don’t believe that, you could be 100% wrong. 

For the moment, we have NO CONSENSUS. But, THINGS CHANGE – quickly and decisively. Goto the website at  http://www.fburg-online.com and sign up today!  Knowing when to change is just as important as knowing when NOT to change.

Just remember – NOTHING is ever guaranteed – and the earth is flat, and maybe inhabited by alien investors.

Stay Tuned !

Jack

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Written: Monday, Nov 16, 2009  (U.S. 7am EST)

IN MY OPINION:

TV weathermen and women are pretty honest folks - and yet their 7-day forecasts are inevitibly wrong. Why?

Because things change !

A week ago, they didn’t know the hurricane was going to change direction, or that increased moisture in the upper currents would bring a sudden downpour. They couldn’t possibly know that a week ago.

Things change !

They are pretty good on today’s weather because they have current facts and data about today. Tomorrow is a little less certain, and a week from now is generally out of the question.

But, they give a generalized long term weather report anyways, based on what they know today. THINGS CHANGE !

We allow them some freedom to change their forecast as time draws close - a leeway – based on newer information as it becomes available.

AND YET, many investors don’t allow stock forecasters the same leeway and freedom to form a different opinion, or change their forecast, when newer information becomes available. They think stock forecasters should be infallible, like the Pope, and that their word should be binding for eternity.

Listen up, folks.  THINGS CHANGE !

Investors tend to think that stock forecasters can actually READ THE FUTURE – and that their forecasting opinion should be written in stone - never to change ever again.

Well folks, it TAIN’T so ! 

Stock forecasting, like weather forecasting, changes, every day, on a dime – because NEWER information is constantly and suddenly becoming available. Maybe this will come as a shock to you, but stock forecasting is NOT written in stone. THINGS CHANGE !

And, opinions change based on newer information coming out.

You may think that your neighbor will be driving you to work tomorrow, but if he wins the lottery, he probably won’t. THINGS CHANGE !

It’s easy to tell investors what’s happening today because, like the rain outside, it’s all evident. Predicting tomorrow and 7-days ahead is a little harder – but most stock forecasters will still give you a “generalized” forecast, based on what they know today – and what is made public.

THINGS CHANGE !

New earnings reports will come out – either higher or lower than expected. The Federal Reserve will take some action that heretofore wasn’t even considered by the average public investor. John Jones will dump all his shares in XYZ company.

It’s all newer information that didn’t exist publically, previously – and forecasts change because of it.

An investor, like Warren Buffett, will suddenly step forward and buy up Burlington Northenr Railroad for a 30% premium over the current market price. In some circles, BNI was a company that had already given a sell signal. Yet, Buffett, for his own personal reasons, decided to buy it up. THINGS CHANGE !

In his case, he wanted control of the company, and wasn’t particularly interested in selling out in 6 months or a year.

It doesn’t mean the forecast for BNI - based on current information was wrong, or bad – but, THINGS CHANGE ! People’s motivation changes – and stock forecasters can’t know everything about each and every investor.

Investors attitudes will change from greed to fear – based on something the White House has done, or not done.

Or, if Congress fails to pass a certain legislation.

Or, if iPod suddently cuts their price in half – thereby soaking up a lot more business than previously anticipated.

THINGS CHANGE ! (and forecasts change accordingly.)

Weather forecasters, on TV and elsewhere, give you their best opinion about the weather, in a “generalized” way, for the next couple of months. It’s GENERALIZED. You’d be very foolish to bet your house or your outside wedding on it – without having an alternative plan ready.

Stock forecasting is very much the same way. We give “generalized” warnings about the future – based on TODAY”s information and consensus of opinion, at the time of forecast. But, THINGS CHANGE !

Suddenly a few mutual fund money managers will interpret next year’s growth report in semi-conductors to be greater than expected, and take action by buying stock in those companies today. Their actions may change today’s forecast for that company.

We all read something different into future reports. What is important is what happens today, and NOT what “might” happen in six months, or a year from now.

Stock forecasters don’t get the same leeway that weather forecasters get – yet the VARIABLES are very similar, and cause forecasts to change repeatedly.

I recently had a disgruntled reader strongly disapprove of something I said earlier this summer – as a long-range forecast, given that the market should act in an orderly fashion.

He assumed those forecasts were written in stone, forever more, without ever changing, based on ever-changing events in the financial world.  How silly of him.

He, obviously, is a novice investor, not realizing that THINGS CHANGE !

(And, for readers like him, if you disagree with my opinions, please feel free to find another blog to follow. These are MY OPINIONS, and I’ll stick with them – with you, or without you. Just please don’t send me YOUR opinions in LONG, LONG emails. I don’t read them. My opinion is formed already, and I really don’t care about YOUR opinion. Go get your own blog if you want to braodcast it more – and if I’m interested, I’ll find you. It’s that simple.)

As far as stock forecasting is concerned, nothing beyond the end of today is ever firm, or etched in stone. You can’t even be sure of what you’re going to have for lunch tomorrow. You might be having it in a hospital bed. THINGS CHANGE.

Weather changes, and so do stock prices – for whatever reason.

Time is money, and good stock forecasts are worth a great deal of money. especially to me. I don’t give away the store (or my current forecasts) in a public blog forum like this for free ! 

I give generalized forecasts here, based on today’s data – but I give timely and specialized recommendations with my subscription service Gold Membership.

And, those are constantly changing, as well. 

You can’t read a blog written by me last April and think it is still valid today. That would be crazy, if you thought that way.

Nobody could have seen Warren Buffett buying out Burlington Northern Railroad – and causing the price to jump so much.

Nobody could see that some international power country would be buying up gold at exhorbitant prices, either. But, they have. To the novice investor, it looks like gold is climbing because of public investment and interest. Not true. A big nuclear country wants and needs that gold, (for whatever reason), and is willing to pay a premium to get it – just like Buffett did with Burlington Northern.

At this high price, that country knows that people will sell their gold to them easily – just like Buffett did with Burlington Northern, for a 30% premium..

It doesn’t mean that gold is a good buy today, just because they are buying it. But, the information wasn’t available earlier, and their motivation for buying still isn’t known.

It also doesn’t mean that Burlington Northern is a good buy today, though Buffett wants it for long term, and for control. His motivation is different than it might be for the ordinary investor.

Without their interference in the “ordinary” market of things, Burlington Northern would probably still have a sell signal attached to it, and gold would be selling at a much lower price.

But, THINGS CHANGE !  The result is today’s pricing, whether we like it or not - and not yesterday’s forecast. Some investors are buying BNI today, simply because it jumped 30%, and some investors are buying gold simply because it is still going up.

Motivations change, and prices change, as well. So do forecasts.

As an investor, you need to stay flexible in the market on a regular basis, because with 3 or 4 BILLION shares changing hands every day, motivations change, and data changes – all the time. To stay “locked in” based on some long-term forecast is really the MOST FOOLISH thing for you to do.

If nobody told you that before, I am now !!!

Good forecasters are rarely wrong, given the data they have available, but the elements they use for forecasting are constantly changing, like weather reports – not for today and tomorrow, but for the longer-term.  Stay current with today’s forecast, and you’ll be okay, usually – unless a Warren Buffett jumps in, and changes everything. 

Don’t plan an outside wedding based on a 7-day or longer forecast, and don’t buy stock the same way. Stay current and subscribe to somebody you trust that has the experience ! 

Understand that THINGS CHANGE – just like the weather, with hurricanes, and thunderstorms popping up all the time.

In general, stocks move by CONSENSUS. (unless Buffett interferes)

And, when CONSENSUS moves in a SINGLE direction, you could be 100% right by following their course ! 

If you don’t believe that, you could be 100% wrong. 

But, THINGS CHANGE – quickly and decisively. Find a good weatherman and a good stock forecaster, and stick with them both.

Goto the website at  http://www.fburg-online.com and sign up today!  Knowing what to buy is just as important as knowing what NOT to buy.

Just remember – NOTHING is ever guaranteed, either by a weather forecaster, OR a stock forecaster. We both give you our best opinions given the data we have at hand !

Stay Tuned !

Jack

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Written: Saturday, Nov 14, 2009  (U.S. 8am EST)

IN MY OPINION:

An irate reader – almost lunatic in nature by his ramblings - challenged my “history” recollection of GOLD.  Without boring you with the incidentals of his comments, I’ll give you MY recollection, and then, you can give me yours. 

Remember, they must be substantiated by FACTS !!!

1) Up to World War I, much of the world’s commerce was on a “cash and carry” basis – with gold being the coin of choice for payment, then selling for about $20/oz. Borrowing between countries was limited based on the amount of gold they kept in their own treasury.

Because of their need to borrow (for reconstruction) beyond their limited gold supply, a number of countries left the “gold” standard – to rely on paper and promissary notes to pay back their debts.

When the Great Depression hit the world in the 1930’s, the U.S. raised the price to $35/oz in order to help other countries with their economies and borrowing capabilities. As a result of this neighboring act, gold poured into the United States from all over the world – for the next 40 years. The United States collected a lot of gold during that time, for a mere pittance, by today’s standards.

Eventually, the U.S. had more gold at Fort Knox and elsewhere than the entire world combined.

In 1971, Nixon (a Republican president) took the United States off the “gold” standard in order to issue his own fiat paper and notes to pay for the Vietnam War – and not use the country’s own gold.

Gold then, as a speculative commodity, began to trade freely throughout the world. There was nothing to back up the gold price. No product, no grain, no service, no earnings, no growth. Gold was traded as a figment of people’s imagination, solely – of what some feeble-minded investors thought it might be worth.  Which it wasn’t. 

Ironically, as the price of gold went up, so did the net worth of the United States and its paper that it used for debt.

Today, the world is off the gold standard, and relies entirely on “TRUST” – trust that they will pay back their debts, in a timely and orderly fashion, just like you do with your credit cards. 

It’s much the same principle as with your CREDIT CARDS.  Companies trust that you will pay them back, while you can go out and buy groceries, television sets, iPods, and Christmas gifts with your credit cards. They trust you – the same as the world trusts us with our national debt, too.

However, because of the outstanding and “limited” supply of actual gold on the open market, gold actually trades in a very thin market, as compared to the billions invested in the stock market.

It doesn’t take much then to cause a price “spike” in gold – because speculators can readily capture the gold market freely, and at will. With speculators all over the world, acting with computers and shell companies, it’s extremely hard to find them and weed them out.

After the Nixon presidency in the 1970’s, the ONLY two times in modern history (the last 35 years) that Gold has had a run up in price has been when the Middle East has been in turmoil – in 1978, and in post-2001.

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2) After the fallback from the Iran Hostage Crisis, between 1982 and 2002, gold found an industrial level of supply and demand. During those 20 years, gold sold between $250/oz and $400/oz – REGARDLESS of economic conditions elsewhere in the country. 

Neither the inflation years of Reagan nor the boom years of Clinton could bring gold out of its $250 to $400 level – BECAUSE speculators were not interested.

The price remained somewhat static for 20 years – UNTIL another Middle East conflict started. That 20-year period sort of DISPROVES every “contention” that all these gold advocates are spouting these days about the magical powers of gold on the economy and world affairs.

ONLY the Middle East moves gold – and nothing more. Recently, it was Iraq, and today, it’s Iran, again.

The economy doesn’t move gold. Inflation doesn’t move gold. National debt doesn’t move gold. Unemployment doesn’t move gold.

ONLY speculators – because of the Middle East turmoil - move gold.

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3) The advocacy that gold is a hedge against Inflation is sheer nonsense – as proved by the price of gold during Reagan’s presidency in the 1980’s.

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4) Nor, is gold a hedge again unemployment, as shown in the following chart :

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5) Gold is a thinly controlled market, which can be “played” with only 6% margin – thereby, making gold a speculator’s dream-come-true.  The average investor would have an easier time making a profit at a roulette table in Las Vegas. 

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6)  Stocks can be analyzed by earnings, growth, sales, debt, and other data. Stocks can be computed to have a “Fair Value”, and sell either at a premium or discount to that Fair Value.

Gold is an ABSTRACT commodity, preyed upon by speculators. Nobody can forecast what price gold will advance to, or decline to. It is strictly in the hands of UNKNOWN speculators – and BUYER BEWARE!

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7) There are no forecasting tools for gold. This commodity is NOT tied to any economic rise or fall. It is strictly a CRAP SHOOT – played by SPECULATORS. And, when the speculators dump out, prices fall quickly. Remember the oil market of 2008? Oil fell from $146/bbl all the way down to $36/bbl.

Is your stomach or pocketbook strong enough for that ?

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8)  The price of gold is determined by Middle East conflicts and speculators who thrive on such opportunities.

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In summary, the United States owns more gold than the rest of the world combined. When the value of gold increases, the net worth of the United States also INCREASES.

As far as speculation is concerned, can anyone be assured that Al-Qaeda is not responsible for the sudden jump in the price of gold. No, you can’t. No more than nobody is sure that the United States, itself, isn’t toying with the price, so as to increase its own wealth.

Nothing can be certain with gold.

And, once you understand that gold is a very SMALL MARKET, and has nothing to do with world economies, the sooner you’ll realize the absurdity of following gold, except as a NOVELTY. Gold has been cast aside by ALL the world’s governments for a reason.

It is a FOOL’S FOLLY – and anybody that tells you the gold is somehow connected with the world’s economy or with the confidence THAT the world has in the United States – IS BLOWING HOT AIR UP YOUR BUTT !!!

The economy is turning around, the national debt is NOT too high, and gold has nothing to do with either.

You have nothing to measure gold’s soundness with. At least, with stocks, they have physical assets (factories), a workforce, a product or service, reportable earnings, a CEO and a Board of Directors.

What do you have by investing in gold? NOTHING !  Speculators hold your fate AND your money.

Whether you like it or not, FACTS are FACTS !!

If your scenario is different, I’d love to hear from you – with FACTS to support your position, and not hysterical gibberish. Otherwise, you’d just be blowing hot air up my butt, and the temptation might be too great for me to expel some of my own hot air on you.

Stocks move by CONSENSUS.

When CONSENSUS moves in a SINGLE direction, you could be 100% right ! 

If you don’t believe that, you could be 100% wrong.  Goto the website and sign up today at  http://www.fburg-online.com

Stay Tuned !

Jack

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Written: Thursday, Nov 12, 2009  (U.S. 6am EST)

IN MY OPINION:

Commodities, like the Dollar and Gold, have no “fundamental” issues to contend with, like stocks.  You can analyze and track stocks using earnings, growth, debt, sales, and a myriad of other business data.

There is no such animal with the Dollar and Gold. They are run basically by speculators. Some unlearned “scholars”, i.e. conservative talk show hosts, try to correlate the Dollar to the national debt. That’s simply not true, as any chart comparing the two will show. 

SPECULATORS control the Dollar and Gold.

And, right now, the chart for the Dollar is lining up in a very positive BULLISH pattern.  The next move could be a strong advance, catching even the most sophisticated speculator by surprise.

In addition, IFFFFFFFF the Dollar does rise, it will cause a big hole in the Gold and Oil markets – as they fall when speculators dump out. The Oil market has been sputtering for almost 2 weeks now, in anticipation of a rising dollar. That’s because there is much more money at stake in the Oil market than in the Gold market.

The Gold market is a “smoke and mirrors” market for small investors who are worried about the U.S. economy – as if buying gold would help the situation.  Where are these “investors” going to spend their profits, if not the United States?  Speculation in gold, in my opinion, NEVER makes sense – for anybody but sponsors of radio talk shows.

The stock market is already churning with a downward internal bias. Remember, the Dow Jones Industrial Average is a bogus indicator in value.  In reality, a 250-point advance on the Dow is equivalent to a $20 stock advancing ONLY 75 cents. (Check the actual price of Microsoft and Disney to see what I mean.) That’s not a HUGE RALLY, as most financial reporters and TV gurus state.  

A runaway Dollar will be a psychological boost to those already in the stock market – and being contrary, will give them good cause to sell out and take their profits.

When CONSENSUS moves in a SINGLE direction, you could be 100% right ! 

If you don’t believe that, you could be 100% wrong.  Goto the website and sign up today at  http://www.fburg-online.com

Stay Tuned !

Jack

P.S.  By the way, (in my opinion), watch the Dollar for the next couple of days. Once it breaks its resistance – and moves above its moving average, there will be no further doubt about the Dollar’s recovery and forward advance.  (Always check the DISCLAIMER.)

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Written: Wednesday, Nov 11, 2009  (U.S. 11am EST)

IN MY OPINION:

A funny thing happened on the way to the market today. Smart, big time investors were found wandering all over the place.  Some were acting – in my opinion – rationally, and others were acting irrationally.

Understand that most money managers with MBA’s in finance are schooled in the same universities and colleges.  They all learn the same thing for valuations and fundamental analysis. It’s like being trained to fly a plane. It doesn’t matter if you take your flying lessons in California, or Vermont – everybody flies the same way.

The same holds true for money managers, with few exceptions.

In a Bull Market, they generally view the future earnings and growth of a company through the same magnifying glass.  And, generally, “consensus” prevails.  They all try to buy at the same time, and they all try to sell at the same time.

Since there aren’t that many small investors buying these days, it takes the money managers a longer period of time to unload 100,000 shares of stock.

Also, generally speaking, from the Technical side (using charts), short term signals appear first, followed by the longer term trends.

But, here’s what’s UNUSUAL today – there is NO CONSENSUS.

All the charts and all the fundamentals are all over the place. It’s almost like the blind leading the blind.  Every time the market starts down, another group of big investors step in and force the market upwards.  It’s crazy 1

Sophisticated short-sellers are being forced to buy back in, at the TOP of the market, instead of at the Bottom, where it normally occurs.

Mutual funds are buying stocks BEFORE they sell for tax purposes. It’s crazy!

And, company insiders and board members have still stayed away from this market in droves. Why ?

HOWEVER, a very dear old friend of mine – years ago – gave me a special piece of advice that I always remember, which has never failed me.

“When there is uncertainly between the power players in the market, DON’T DO ANYTHING !”

She said that when the market doesn’t follow a very specific and set plan that you recognize, DON’T DO ANYTHING – until the plan becomes evident.

In other words, when there is no CONSENSUS among the large investors, when the charts are screwy, between the short term and the long term, and when fundamentals aren’t adding up – just STOP at the intersection BEFORE you cross the street – and look both ways.

Both sides can’t be right. And, when a Buyer and a Seller meet on the floor of the New York Stock Exchange, buying and selling the same stock – ONE OF THEM IS 100% WRONG !

My advice?  Wait for the Consensus !

If you don’t, you could be 100% wrong.  Goto the website and sign up today at  http://www.fburg-online.com

Stay Tuned !

Jack

P.S.  By the way, (in my opinion), the market should be meeting some resistance at this level. It also appears that from my charts, the short term trend has about run it course – for the time being. I would look for another retreat back down to the support level at the moving average line.  I’ll reappraise at that point.  (Always check the DISCLAIMER.)

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Written: Saturday, Nov 07, 2009  (U.S. 7pm EST)

IN MY OPINION:

Fundamentally, tax-selling isn’t over yet, and many stocks are already trading at or near their Fair Value levels. (Sophisticated investors like to buy at a 30% discount from Fair Value.)  So, for the most part, there isn’t much incentative for institutions or mutual funds to buy anything priced this high.

Warren Buffett’s venture into the rail business was an exception. He ABSOLUTELY wanted control of the business, without any other competition. So, he paid a “premium”, well over Fair Value, for that stock (in my opinion). His high price excluded any other bidder from running up the stock. Nobody else was foolish enough to try to outbid him.

After all, who would think that “railroads” would be the next big growth industry? Maybe in 1915. Not sure about today. We’ll see if Buffett’s magic is still any good.

On the TECHNICAL side of the market, the Dow Jones 30 Industrial stocks break down like this :

+5 – Still climbing or reaching the top - CVX, HPQ, MCD, MSFT, TRV, UTX, XOM.

-1 – Rounding the top, on the way down – AXP, CAT, KO, PG, VZ.

-2 – Start of a possible decline – DD, KFT, MMM, PFE.

-3 – Sell signal awaiting confirmation – AA, BA, CSCO, DIS, IBM, INTC, MRK, T.

-4 – Confirmed Sell Signal – BAC, GE, HD, JNJ, JPM, VZ,

-5 – None have reached the dreaded “-5″ level yet. That occurs when there is no further possibility for an advance.

Only 7 stocks (Chevron, Hewlett Packard, McDonalds, Microsoft, Travelers Insurance, United Tech, and Exxon Mobil) are carrying the rest of the market. The other 23 have already turned away from the peak.

Again, these are merely MY OPINIONS – but, other money managers are seeing the same thing. Read the DISCLAIMER before taking any action.

What are YOUR stocks doing these days? Are you confident about them? Which SECTORS of the stock market are the weakest now? If the market falls, how far down will your stocks DECLINE this time?

Do you have all these ANSWERS ?

If you don’t, you should sign up today at  http://www.fburg-online.com

Stay Tuned !

Jack

Written: Thursday, Nov 05, 2009  (U.S. 9am EST)

IN MY OPINION:

There are short term signals, and there are long term signals. By far, the most important signal for any commodity is the LONG TERM Signal.

In prespective, I should remind you that earlier, as the stock market began its own crash, in April 2008, the Dollar was even lower than today’s Dollar. It had gotten all the way down to 72. and then, as the stock market began to decline, the Dollar recovered nicely back up to 90.

Suddenly, at the beginning of last March (@90), the Dollar gave a long term “sell” signal – and for the last 8 months, it has been spiraling downward, ever since, stopping recently at 75. During this collapse of the Dollar, short term rallies have been almost non-existent. (At the same time the dollar was crashing, the stock market started rising, just as strong.)

However, a few days ago, as the stock market began sputtering, the Dollar gave a Short Term Buy Signal of +5, a very strong buy signal, even for the Dollar, and it was the first Short Term Signal since last March.

BUT, more important, yesterday, my Long Term Chart also blinked a +3 Buy Signal. That made me sit up and take notice. Short term signals are for experienced traders and daytraders, especially those in and out quickly.

The Long Term Signal is indicative of more confidence and stability in the marketplace because the Long Term Signal is an indication of sophisticated money entering the market – in this case, on the buy side.

A +3 Long Term Buy Signal is a definitive signal that something is happening with the Dollar. A +4 and +5 are used for confirmation of the previous signal. 

The Dollar is resting now at a “support” level. If that level holds, and the Dollar rises again from here, it will undoubtedly move to the +4 and +5 confirmation levels.

(As a side note, the other day when Warren Buffett announced his interest in the Burlington Northern railroad, short-sellers of the Dollar began covering their positions, and the Dollar rose dramatically. When short-sellers get out of the market, it usually happens at the end of any downward trend.  That should be a signal for the rest of us that the end is near.)

A rising Dollar doesn’t help the stock market though. On the contrary, the stock market is already at a -3 level, and falling.  The stock market is generally overvalued and overpriced – so, it will head its own way, which I predict will be cautiously downward.

However, a rising Dollar will show the world’s confidence in the U.S. economy, and a confidence in President Obama’s economic and stimulus plans. Politically, that brings a few pluses of its own for him.

With General Motors outselling Ford, and Ford bringing in a billion dollar profit this quarter, it’s no wonder that the world has become more confident of the Dollar.

Oil and Gold have not reacted to the Dollar yet – but I expect some weakness soon, in both those markets.

For the moment, anyways, a Long Term Buy Signal is a welcome sight in the realm of the Dollar. I can only hope that it is not a fluke. Time will tell.

Stay Tuned !

Jack