iamned.com

Another Great Week

I’s great being ned. Its great being right. Its great making money effortlessly with buy & hold as ‘experts and gurus’ fret over inconclusive charts and lagging economic data. The DJIA ended its forth week on a positive note, closing just 130 points shy of my 8,200 target. This was even after a 2.5% selloff earlier in the week.

On seeking alpha there is still concern that Obama is going to raise taxes and impose regulation, which will hurt the recovery, but there is no guarantee any of this will happen. Obama is no Herbert Hoover, and he is very politically savvy. He is fully aware that as the stock market and economy recovers he will have less political pressure to rise taxes, especially in close proximity to an election season. In addition, to raise income taxes he has to get it though the senate where it will fail.

On Wednesday Fred Wilson from seeking alpha wrote an article that embodies the bearish argument
http://seekingalpha.com/article/130418-the-markets-may-be-better-but-not-necessarily-safer?source=commenter

I always find it funny how all these bearish authors say the rally is inevitable yet never go long. If it’s so obvious why are you complaining? Just make money.

Here’s my response:

At this very moment in time like taking the derivative and setting it equal to zero, yes the economic picture sucks, but the market looks waaaay ahead and sees the possibility of a recovery. A lot of people shorted on the way down, and now these shorts have to cover or risk insolvency, which is fueling the wall of worry.

This ‘bounce’ is actually pretty substantial and not as easy to dismiss. The S&P 500 is up nearly 200 points or thirty percent from its low. That is probably enough to put the final nail in the coffin for this bear market.

Also, you mentioned deficits. Rising deficits aren’t necessarily bad for the economy or stock market as shown by the post WW2 recovery and the debt fueled recovery of 2002-2007 or Reagan;s deficit spending. Deficit spending on tax cuts and other stimulus does work.

———————————-

Still recommending buy the dips of globalist, smartist stocks (Goog, Aapl, Rimm, Mastercard, Postash to name a few) that benefit from deficit spending, a falling dollar and rising commodity prices, cause that is where we are headed. The deflationary spiral is now bunk thanks impart to recent economic data showing a rise in core prices, as well as a steady rally in commodity prices.

3 Responses to “Another Great Week”