Markets Absurd Climb- Gold stays over $1,000.00! Market Update October 14, 2009

Marc's Notes:
The market continues its ascent in absurdity and any financial advisor that tells you to buy in this market is just plain crazy in my opinion and you should dump them immediately. I met with another client yesterday who left E. J. (A Large brokerage firm) and she said they tried to convince her to stay in the market, and when she said NO, they charged her $500.00 to close her account. I don’t know if that was true as I never saw the statement but she has no reason to lie. She mentioned she was losing money last year and finally came to me to stop the bleeding, which I did. She told me had she stayed in the market, as advised, she would have lost many more tens of thousands.

Because most advisors never have a point at which they will tell you to SELL, she (and you) really never had a chance. There never was an exit. Be glad the markets stopped falling where they did,or you may have lost a lot more.

Today’s “price” for the S and P stock market with write downs is 140 = P/E.

In other words, the price for “the eggs’ in the market, the price you pay for stocks, is at an ALL TIME HIGH, meaning it is VERY expensive. Couple that with terrible economic fundamentals, a falling US DOLLAR, rising inflation, massive US bailout deficits, low volume on trades, and rising unemployment, and we have all the makings of a possible severe wipe out in the markets. I continue to label this risk as “ORANGE”, meaning a crash is possible in the near future.  I would not add stocks now except a few dividend payers. I would beef up my contrary funds, add foreign currency funds, add physical gold and silver, keep most cash safe in US DEBT, and hedge with an interest rate fund or 2.

Holdings:
Gold and Silver- Gold staying over $1,030.00  a key level. Short term who knows but long term, keep adding. China is a big buyer and so are major investors.  ADD and ADD  for insurance. Can it go down? Of course, but we don’t hold gold for profit, we hold it for insurance.

Swiss Annuities- the deadline for notifying the IRS is this month. It is a grey area so I defer you to your CPA or own judgment as to whether to notify them using form TDF  90-22.1.
I notified them as the penalties are severe and you would have to fight them if they didn’t see it your way and that would be a bummer.

Interest rate funds- lower. The US dollar is falling but rates are also falling. Good for you folks refinancing.

Foreign currency funds and Swiss Annuities held in Swiss Francs- Rising super fast- the dollar is falling like a rock. Your foreign currency funds and Swiss Annuities are making money hand over fist. HOLD and ADD

Dividend Payers- HOLD, inflation hedge. The commodities ones are rising actually faster then the market. These also will follow any market rally or fall.

Natural Gas- Rose nicely, now backed off. You should now be stopped out of half position for about a 20 % profit. (If you bought last month or so). Hold the other half. Those that bought higher, HOLD. Ok to add small amounts here again.

Oil- Up but had its run for now. Oscillating. I hold some oil juniors but not adding at this time.

Contrary Funds- DOG   SCC   SKK    Hope you hold some.

Regular Mutual Funds your broker sold you- SELL if they don’t pay at least 8 % in dividends, otherwise ride the iron horse to new depths. Just my opinion.

Real Estate- Propped up by the FEDS programs. These are due to run out in November but expect an extension, if not in November, when the numbers start to fall. All in all, this asset class has about 10 to 30 % more downside, so if it was I, I would wait to buy.

Commercial Real Estate- One word- Adios.  Expect major news to increase on this class.

Unemployment- 4 words. There will be more. Expect another “Announcement” on a jobs bill. More money thrown down the rat hole.

US dollar- I expect a rally soon, maybe. Long term, wipe your “you know what” with it.

Inflation- Up and away. .Watch the price of GAS at the pump for your clue.

Health Care Bill- You will get it, yes, you will get it good and hard.

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Meet me at Yoga:
Join me for a free yoga class!  Meet me, lets talk and sweat and the class is free. My friend has talked me into giving it a try. As a karate buff turned all beat up old guy, I should be ok with the stretches. Can you outstretch me? Don’t think so!
Meet me at Shuniaa Studio, across from Nevada Courthouse near Friar Tucks, 212 Church St on Wednesday, October 21st, about 8.15 am (Class starts at 8:30 am and goes to 10:00) . Its free to first timers! How can you beat that.
I will be there to meet and greet.

All for now
Marc