Saturday, November 21, 2009

Interesting perpestive on the stock market

I have a friend who is seriously involved with the stock market and analysis of the economy. He sent me the following analysis, what do you think?

Dear Mark

Additional info:
Remember when you bought stocks, oil and gold in
December 2008 - you shorted US$.
Now it's going the other way.
There is no other way.
US$ down everything up,
US$ up everything down.
However, since China will not allow the US to destroy the US$ (as they spend to oblivion)
the yuan is pegged to the US$ - unchanged for years
(since China announced they were getting out of US$ -
September 2007) - but they did the opposite.
That was the day C$ hit US$1.1.

You will notice that the whole market did not bottom until
March 9, 2009 when the C$ also bottomed,
but gold bottomed first in December.
Conversely, the top for the market was in September 2007 (when C$ hit US$1.1).
Same thing happened in 1999-2000.
Gold bottomed after September 2001 -
when they cut interest rates.
Just like the 1970s.
Not to mention 1930s.
Now interest rates are at 0% - just like Japan since 1991.
But, mortgage rates did go up.

"Investors" have a short memory.

The economy is not gettting better (affecting politics!):

Based on the charts for currencies (US$/C$/Euro/Sfr/yuan/Ruble),
gold, oil, real estate, technology, financials,
This recession will last forever,

which DOES NOT mean you cannot make money in the stock market -
you just have to be patient and disciplined
and you need to understand what you are doing.

Do you actually know what mutual funds hold?
I bet even the conservative ones hold stocks
(to boost returns).
Notice how financial experts, analysts, stockbrokers, politicians...
always buy - almost nobody sells!
Good luck.

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