Today's market was indeed a sleeper with light volume and a slow bleed into the close. What we can be excited about is that we are back into the 10,500's. Not. The Dow drooped to just under the 10,600 line with no particular conviction one way or the other today.
The existing home sales set another record today which begs the question "When will this housing boom be over?" The bond market did drop a little today but again with no real conviction that the Chinese might take the punch bowl away. Well, at least until they do, we should stay at the party, the bold bulls must be thinking.
We mentioned our near term angst over the precious metals market but didn't make a firm decision on what to do. We have some nice profits from this recent run up and we might want to be especially careful here. It looks as though the mining stocks are following somewhat to the stock market is doing, they are stocks after all. If you own any of them, you may want to be watching them, too. We like to say the mining stocks move before the metals and today we say a bit of a down draft in the stocks without much movement in the metals. It just makes you sit up and take note, which we are.
The big news today, other than housing, was the mass exodus from the AFL-CIO. This might mean something to the markets but as of now, I can't really know what that might be. Any thoughts out there??? Leave a comment for us.
Dow Industrials: 10596.48 -54.70
BGEIX: 11.11
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2 comments:
Two thoughts I think I thought I had. (MMQB anyone?) Without plagiarizing too much from my favorite NFL sports columnist (Peter King) I think I thought two separate albeit (I love writing and saying albeit -- it is like getting a bonus 3 word in one deal at the local stop and shop Webster’s store, huh? you say - sorry....I digress) equal thoughts after perusing your latest blog.
#1 - Lets take profits for they are truly a fleeting thing and especially so in this market. I make this decision for 2 reasons.
A) Read an article in the WSJ that said some brain damaged emotionless people have demonstrated better performance records in the stock market than do people without brain damage and with emotion? Take out the emotion and the profits. And we all wear safety helmets? Maybe what we need is a good kick in the head. Maybe Bill & Hillary should open their own hedge fund!
B) I missed a modest 13% gain a few months back in my 2-1 inverse DOW mutual fund and now find myself hoping to hit 10,100 again. Should have taken the profits when I had the chance. A small % gain over a short period stretches annual returns higher and higher. Moral -- ACT!
...and finally #2 - The AFL CIO breaking up will be viewed as a positive for the stock market because the press spin will tell us how it strengthens the COMPANY bargaining position and should allow them to strong arm union members into being more productive and in cuttting expenses. Ha. Ha I say. Getting union members to be more productive is unlikely. I’m sure their will be bulls out there beating the pendulum swinging drum about how this signals the end of union power blah blah blah, yadda yadda yadda you can imagine the rest. This would work if there was a need to be more productive. Too many cars in inventory already. Cutting expense is not likely because of little things known as contracts. Both sides are bound for the immediate future.
In an attempt to keep your eye on the ball for the big 2, the truth is that both Ford and GM have outdated assembly plants, an aging and unhealthy workforce, huge pension obligations, and relatively nothing exciting on their production lines in the form of product. How long will employee discounts maintain profitability? When will they catch up? Will they?
I could be wrong. Maybe good old American inventiveness and ingenuity will once again ride to the rescues of our automobile industry with some technological breakthrough. Maybe a car that runs on air or is powered completely by hamster dung. Keep on the look out and keep your windshield wiper reservoir full with fluid just in case that pig takes flight….
Erick
I suppose you would also like the words nonetheless or nevertheless then huh Erick? Or maybe those are too lengthy... how about a two-for-one: thereof. That's a neat one too. It has been a long time hope you and the family are doing well Erick. Take care!
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