Can’t Stop the Upside & Debunking Socialism Myths
Another huge rally…more proof that the iamned.com philosophy of buy all dips really does work and that the Goldilocks economy is making a comeback in spite of the mental, media generated recession and imaginary credit crunch. Oh this fake credit crunch and socialism is so painful. For the love of god make it stop. My Google, Mastercard and Potash stock keeps going up. Please make the pain stop.
But on a more serious note I would like to debunk the leftist, paleoconservative myth that the government is somehow on a slippery slope to socialism by intervening in the free markets and preventing insolvent businesses from failing. True, the government has bailed out a few banks, but these companies were indeed too big too fail. The economic consequences of NOT bailing them out would have exceeded the monetary cost of the bailout as I write about in more detail here. However, what is being overlooked is that 600,000 businesses are created every year, and 80 percent of all small businesses will fail within five years. To say that the government is somehow preventing failure is preposterous. There is no systemic risk from letting these tiny businesses fail, or even larger supposedly iconic businesses like GM fail.
The very fact that Americans are allowed to risk their financial security on an endeavor that has an eighty percent chance of failing is the antithesis of the socialism or communism that so many fear.
Instead of complaining, I suggest buying Google, Apple, Mastercard, Potash, Visa, Bidu, Research in Motion and other globalist, smartist stocks that benefit from a falling dollar, rising commodity prices, and deficit spending. Otherwise, you can sit on the sidelines like a Huffington Post-reading welfare liberal crybaby while everyone else makes money in what is emerging to be the next huge bull market that will eventually catapult the DJIA to 14,000 within two to three years.
5 Responses to “Can’t Stop the Upside & Debunking Socialism Myths”
Comment from Jimbo
Time April 10, 2009 at 7:46 am
Yes another up day. It’s cyclical and doesn’t prove anything. Just three days ago the indices were falling. The newbies dumped their stocks out of fear and took it in the shorts just as the big boys on the Street had planned. Now it’s time to “put everything back in the market”. A week from now there will be another “crash” of 3% and the media will become pessimistic for a few days. Then it will go back up 3% and the media will call it another bottom. It’s contrived. Take advantage of it. Sell on the rally and buy on the crash (or as you say, buy the dips). Repeat.
Comment from Jimbo
Time April 10, 2009 at 8:47 am
Well, I looked up your recommendations. Here’s my devils advocate opinions on a few of them:
Google is almost back where it was in February (~380). A year ago it was at 580. If you had bought it for 270 at the bottom in late November and sold it right now for 370 you would make about 25% profit. Not impressive considering you could have put your money into a lot of other beaten-down stocks and got 100% or more lately. For example, Citigroup is up 300% just over the last month. Google also took a dive in early March and was back under 300. Hindsight is always 20-20. It took a painful ten-point dive on Tuesday. Google looks poised for a small sell-off since it has climbed ten points over the last two days. Next week might be a good time to buy if you want in. Just my opinion of course.
Apple was at 180 a year ago and now it is at ~120. I hope you didn’t buy it a year ago. It trended with the market as a whole this week - down on Tuesday morning, back up on Thursday morning. Stable I guess.
Mastercard looks like a nice daytrader’s stock - it has predictable 2 to 3% gains during the day (on a rally day of course) followed by predictable morning and late afternoon selloffs for the shorters to get their money too. A good stock to hold for a few hours at a time. Long term is purely speculative - a year ago it was over 300 and today it’s down at 172. But it looks poised to modestly recover due to good fundamentals.
Potash Corp of Saskatchewan was ~220 a year ago and now it is at 85. It’s down almost two-thirds over the year. Nice long term investment there (lol). I seem to remember Jim Jubak on msnbc.com recommending this stock to everyone last summer on his website. For this week it dropped down to 79 on Wednesday (following the market) and bounced back up to 85 today.
My AIG that I actively trade went from $1.05 on Tuesday to $1.16 today. I dumped it for a quick 10% today to get rid of it at the top of this week’s rally. It looks poised for a sharp but short selloff soon as the next surprise contrived two-day slump kicks in. Just my opinion of course. This would be a good buy when it drops down around $1.00 again. Don’t laugh at buying AIG - the government put $180 billion into this company so it’s not going bankrupt. AIG also manages the Congressional Pension fund, so the politicians won’t let it fail.
I am excited about the new anti-shorting regulations in the works. I haven’t read them yet so I don’t know if they are going to fix anything. I always prefer to go long, it seems more wholesome somehow. I think the only thing that is going to get this market moving steadily north again is to make short selling less profitable. I’m glad to read all the shorters whining about how they were poorly positioned the last few weeks to make their huge profits at the expense of ordinary investors.
Comment from Administrator
Time April 18, 2009 at 11:37 pm
thanks for your comments guys. I appreciate opposing views because they make me questions my own views more closely.
Comment from TJ
Time April 20, 2009 at 5:35 pm
S&P Earnings fall to 1930s levels
http://tjhorton.blogspot.com/2009/03/s-earnings-fall-to-1930-levels.html
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Comment from DTCapital
Time April 10, 2009 at 2:21 am
You may well be right. I was shorting the market till about early March, and then I noticed the short-term picture changing quite dramatically. I’m good with going long for the time being. IMHO, the recent Fed’s actions seem to have delayed the REAL meltdown for another 2 years.