Some Market Analysis


Some readers are looking for investment ideas. I suggest we go over each asset class one by one:

Precious Metals: Everyone MUST own gold and silver because of what’s coming. Inflation IS a problem, it just hasn’t had an impact, but it’s built into the system. It’s simple: get some cash, go to your local coin shop (www.find-your-local-coin-shop.com) and load up on however much you could afford. (Bars only, no coins please).

Real Estate: In America? Forget about it. The real estate market remains overvalued on many scales and will recover when either no one has any money to buy a home or when interest rates are at 20%. Until then its like chickens without heads trying to catch a hat on a windy day. Ain’t gonna happen. (Buying foreclosures: Good strategy, bad timing).

Stocks: Many people did extremely well over the past few months. But the past is the past. I think markets will disappoint over the next few months, due to lack of volatility and motion, making traders mad. They say: 3/4 of stocks follow the major indexes. If you want to do make money stay in the other 1/4. (Biotech comes to mind).

Bonds: You mean lending money for zero return? Not my style. Or do you mean lending money to financially insolvent companies? Definitely not my style. The only reason people buy bonds is for safety and today most don’t even fit that category.

Commodities: This is probably the trickiest of all. It is after all the decade of commodities and with inflation around the corner it should payoff. Maybe its the hated and contrarian trade everyone is looking for. Maybe we’ll look back in 5 years and say “Commodities! Duh!”. Then again, maybe not. If commodities do rally, you’re better off in a concentrated position like gold.

My suggestion: Just take in your dividends and save your paycheck. Buy silver if you don’t have any. Jim Rogers says “I want someone to put money in the corner and then I just go over and pick it up”. I like stupid investments – ones that are so obvious yet mostly ignored, even ridiculed. That way I don’t have to think much and I make also make money.

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