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Is it time to panic?
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This Link is located in the Public Channel Contrarian Stock Market News and Views.
Posted by lucretius 14 days ago (contrarianprofits.com). Views: 4
Tags: stock market news contrarian investing financial ideas stock ideas |
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Baltimore-(TFN):Time to panic? If you are part of the Obama administration the answer is yes. If you are an American investor, hold off on the freaking out for at least another month or so.
With the nation’s unemployment rate officially in double-digit territory and the under-employed rate ready to the 20% mark, the politicians that promised bliss in the days ahead are eating their words today.
And that means Wall Street is eating its recent gains.
For nearly a month, the Dow has hovered around the 10,000 mark. After hundreds of billions of dollars were withdrawn earlier this year, it was relatively easy to put that money back to work and send the equities market higher.
But now that the economic data is showing facts of slower-than-expected expansion rather than “ideas” of growth, investors are forced to explain their logic. The Dow doesn’t want to budge from 10k.
So far, I’ve heard very few reasons for prices to go any higher. Maybe in China or Australia, but certainly not here in the land where everything is changing.
Think about what has occurred over the past twelve months and tell me if you believe today’s companies are worth as much as they were two years ago or even five years ago.
We’ve had government takeovers of major banks, mortgage lenders, auto manufacturers and insurers. Washington has told people how much they can make in a year. Legislators even introduced retroactive taxes.
Then there is the threat of cap and trade blowing energy prices (an input to nearly every American business) sky high. Now it is mandatory healthcare and the risk to corporate payrolls, tax structures and discretionary spending.
After all that, I hate to think about what is next. An assault on allergens?
*** Maybe I’m just being too pessimistic. After all it has been a long week and I spent five hours at the airport in the middle of the night yesterday waiting to pick up my mother-in-law.
Don’t get me wrong. I think there are some fantastic buying opportunities out there. There are just not in the places most Americans are looking.
But since the mother-in-law brought me eighty pounds of fresh Alaskan salmon, halibut and moose meat (she’s as close to Sarah Palin as you can get without committing to Playgirl), I am starting to feel a bit generous today.
That means I’m going to share with you what I am certain will be the biggest gainers of the next twelve months.
First… healthcare. Think about it. Who is easier to rip off than the federal government?
Just ask Haliburton, Goldman Sachs and whoever sold those $750 toilet seats.
Within a year of signing some diluted version of Pelosi-care, the headlines are going to be filled with record-breaking profits out of the nation’s largest healthcare providers and drug companies.
If Wall Street has the nerve to toss out billions in bonuses while the ink on their bailout checks is still drying, imagine the kind of zeroes that will be added to the paychecks of healthcare executives.
I can hear the excuses now. “If we want to save lives, we have to retain the best workers.”
It is going to be a feeding frenzy when Uncle Sam is the third-party payer.
Next, forget about gold.
One reader wrote to me yesterday and said, “I think it will hit $2,000, but it will probably hit $600 first.”
Could not have said it better myself. Gold’s value is too tied up with political moves and currency fluctuations. With one well-timed press release, China can send the price wherever the heck it wants.
I don’t want my wealth facing that kind of risk, especially after we just rammed Beijing with the largest tariffs yet.
That’s why my money is on palladium. It’s much harder to find and has a huge industrial demand.
Palladium is at the heart of the world’s commodity carry trade. I told TFN Strategic Traders to play Stillwater Mining several months ago and the trade nearly doubled in a week. It is still a good buy, especially as China’s auto industry takes shape.
Finally, go short on natural gas. Get as much leverage as you can because prices are about to plummet fast.
On Wednesday, the International Energy Agency was one of the first major groups to back my opinion. In a draft of a report due out next week, the influential group warned of a massive glut of natural gas as global demand begins to top off and turn around just as we are pulling more of the stuff out of the ground than ever.
But don’t wait until Tuesday to read the report. You can read my version right now. In it, I recommend three ways to play the situation.
So far, two of the plays would have already doubled your money. All three are well into positive territory. Prices are almost out of my buying range, so do not hesitate to take action.
*** Before I go for the week, I need to make a correction. Yesterday, I inadvertently said the Senate extended unemployment benefits for 14 months. The actual extension is 14 weeks.
I apologize for accidentally releasing my psychic secrets. The 14-month extension won’t come until next spring, when Congress finally makes it illegal to layoff any employee.
Enjoy a great autumn weekend,
Andrew Snyder
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