Sunday, March 01, 2009

Low is Near

Top Line: Global stock markets are still falling. We continue to expect a solid low. Since no buyers have been strong enough at these levels, they will have to come in at lower prices...

AIG is back in the news again with its fourth injection of funds. This time it's for $30 billion. We're not positive but the world markets are trading lower this evening including the US futures seemingly on the back of this news.

Bear markets are tough markets to make money in, mostly because the population hasn't lived through one for a very long time. Yes, there have been significant drops in the market over the period of the last bull run, but the last bear market was prior to the 1982 low. That's over 25 years ago. Who can remember what happened before that?!?

The lows of last October and November are now being challenged here in the last few trading days. Many see that the broader indexes are not challenging their own lows but say that they should do that soon. We like this kind of thinking process when the bulls agree that the market needs to go down.

Our position is that the blue chips are putting in their lows here and that they will be in this month, hopefully sooner rather than later. We like the Friday jobs' report as a good time to put in a low. Surely, the report will be terrible with the consensus view around 600K losses. At some point the market just expects bad news and has it priced in (the say the market has "discounted" the news).

We think the potential for a huge rally is still out there. Pessimism is thick and people just don't want to think about having money in the market anymore. They certainly don't want to talk about it much. Yes, we are here to discuss it most every day.

We have told you that we moved much of our portfolio into commodities, mostly energy related funds. This has been ok for our trading portfolios compared to our 401(k) which has included some exposure to ING since October. This was not a very good idea at the time and we should have stuck with the other funds in the 401(k) which have done better than ING. No, they have not fared well but better than ING.

Gold has been telling us for while now that the rest of the commodities will probably regain some traction in the next phase. Tonight gold is trying to rally again, up over $10. Still, it's a ways to get back to $1000.

We have picked energy as the place to be along with gold miners and some other funds. Natural gas carved out a scoop of prices under $4 last week and has now bounced out of that range. For those of you in the cold belt, that has Not translated to lower energy bills this winter because the providers were so scared last summer that they bought futures in order to provide natural gas this winter. We think it is or has been well undervalued and is one of the areas we have pursued.

Oil is up about $10 from its lows and this is another area where we have been sitting. Overall, our positions have not performed too well but with prices turning around, we think we are well positioned to see some good gains going into the summer.

We have a couple more Maui pics for you. One of our best whale shots and a picture of Maui with Haleakala in the distance on the right (added another one with Jason in it).





Jason said to take his picture so there was some Proof that he was in Maui, so Jason here's your proof. Do you remember being there? It's been a long time, we need to go back this month...


And, of course, one of Jackson. Here he's enjoying a little pool time with Gramma.

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