Having lived aboard a sailboat for 2 years I was stricken when I saw the movie "PERFECT STORM". I know these are things you want to avoid at all costs. Even little storms can play havoc with your life style on a boat.
From a world view it looks like we are headed into a perfect storm of world macroeconomics. That means every one in the world is going to be impacted economically by the developing global economics. The more economically developed the country the worse they will be affected. Those third-world countries just working their way to becoming second-world countries can easily be set back 30 to 50 years.
What am I talking about?
People need food and shelter and after they have the basic necessities they will buy nonessentials such as entertainment and toys (boats, cars, jewelry, bigger houses, second homes, etc.). These are all purchased because the person has extra units of credit called money with which to buy the extras. In order the get that extra money he has to have a steady job. World wide there is excess productive capacity. Approximately 25% of productive machinery is idle; we are working at about 75% of capacity where the normal rate of production is between 87% and 92%. That means that many who were at those machines are now sitting at home wondering not about a new toy to buy, but how to make the next mortgage payment.
Everything looks smooth. The waters are calm and the breeze is at our back. When that perfect storm was forming in the Atlantic Ocean there did not seem to be any danger, but the meteorologists watching their satellites and computers could see that all was not well and a terrible storm was forming. They realized when it hit that ships would be at high risk.
There are meteorologists of the stock market. They are a combination of technical and fundamental analysts and it is their job to predict the stock market weather. Like weathermen the job of prediction is not easy nor is it an exact science, Many get it wrong, Today the news of the stock market and the economy is dominated by the fundamentalists who see excellent weather and tranquil seas. Many technicians see it otherwise. They are predicting that there are formations that could produce a perfect storm that will wipe out many portfolios.
Historically the timing of fundamentalist (those who follow the reports of company profits and government statistics) usually lags while the prediction of technical analysts (those who follow chart patterns and historical data) has been much more accurate.
The key to the stock market is timing. The investor wants to own stocks and mutual funds while the market is advancing and to be in cash while the market is declining.
Today the fundamentalist weathermen say buy while many technician weathermen are recommending cash. In the next few months we will see if the weather is calm or stormy.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
Oswego taxi to Midway ..To begin, you might look at playing the stock market... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
In 1960 an engineer working for a watch company in... Read More
Quick, look out the window. It's raining. No, the sun's... Read More
Sometime around 1980, can't remember exactly, there was a flight... Read More
Spread trading is a technique that can be used to... Read More
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More
Have you been listening to the talking heads on CNBC-TV?... Read More
Ever jumped out of an airplane? It's OK if you... Read More
So you're started trading, you bought some positions with your... Read More
Options trading can increase the profits you make when trading... Read More
How can you dispel an illusion unless you look directly... Read More
We keep hearing about this bear market and that the... Read More
I don't know what kind it is, but I saw... Read More
According to Investopedia Inc. the penny stock market has seen... Read More
(1) Stock Market is Tough Place to Make Any Money... Read More
There has been great condemnation recently because China has been... Read More
When an individual investor wants to roll up his sleeves... Read More
Everyone who follows the financial news has heard of mutual... Read More
When you invest in the stock market for ever-increasing cash... Read More
For weeks, no, months we have been bombarded with nothing... Read More
Mutual fund investing is a lot like Thai cooking. Everyone... Read More
It seems that every day I turn on the TV... Read More
What the heck am I talking about?It is often said... Read More
When you become interested in a stock or mutual fund... Read More
shuttle from Midway Morris ..This is an extract of an article which was first... Read More
Stock trading remains a very competitive field and the stock... Read More
According to Investopedia Inc. the penny stock market has seen... Read More
Peter is a professional trader, Paul is not. Peter has... Read More
I read a comment by a forum member on another... Read More
"If you don't know where you are going, any road... Read More
For years investors have been taught to look into the... Read More
For the year 2000 we have seen hundreds of mutual... Read More
The Law of Chaos is the theory of random unpredictable... Read More
If it walks like a duck, quacks like a duck... Read More
Sometimes the best way of lowering exposure to risk is... Read More
I made my very first investment in the stock market... Read More
It looks like the market is ready to start up... Read More
How can you dispel an illusion unless you look directly... Read More
Every publicly traded company is required by the SEC(Securities and... Read More
Every Wall Street analyst, financial planner and broker will tell... Read More
One of the big advertising kicks today from mutual funds... Read More
Options trading can increase the profits you make when trading... Read More
Carefully thinking through your goal as a trader is of... Read More
Well maybe that's overstating it a little, but it's certainly... Read More
The stock market often closes a week in the middle... Read More
There has been great condemnation recently because China has been... Read More
As a novice trader, you'll often feel the need to... Read More
Because you don't feel too sure about which stock or... Read More
How many people went to a cash position this week?... Read More
Stocks & Mutual Fund |