Thursday, January 8, 2009

2009 Markets

It is a new quarter and a new year. The one thing that I can comfortably predict is that the market indices will be better priced by the end of this year. That is the good news. In the meantime everyone has to work for their money. Even Bernie Madoff will be picking up a new skill manufacturing license plates along with Conrad Black to justify his soup.

The gross global wealth has been halved. Last year, the money managers were scrambling for places to put the piles of cash and credit that they were sitting on. Today they are scrambling to find that same cash and credit anywhere.

The folks who believe in what they are doing will be around knocking on your door looking for your support. If you trust them, give them your support. This is the greatest wealth building era in our lifetimes. There is a reason that Buffet bought Wells Fargo. They are going to win.

For the stock investor there are plenty of sound companies around at knock down prices. Starbucks is a gimme as are the majority of the good food franchises. Go for it. Obscured with all the noise is the fact that technology companies are ready to emerge as hot commodities again. The real breakthroughs are happening at a sprint and development is right behind. They still feel that they have something to prove.

The bad news is that we will be listening to nothing but bad news for the coming year. Every company using leverage is struggling to keep the ball in the air. There will be more casualties, but they will merely fall into the hands of their competitors. There will be plenty of red ink while we all wait for next Christmas.

Real estate has possibly bottomed if the right steps are taken and implemented in the current cheap money environment. It is just that we will get to look at the bottom there for five to ten years. And if I had my way, I would set up a stress skin panel manufacturer and cut half the building costs out of new houses, making sure that cheap new inventory never runs out.

The oil industry is suffering from a huge drop in demand that may last longer than I think possible, even though supply will be slipping also. In the meantime cheap alternate energy is hitting its stride.

I do not think that the stimulus packages will stimulate anything, simply because it cannot replace the demand lost with half the global wealth. It will help business to become whole again. This will allow steady internal growth to sponge up the slack in the economy.

In the meantime, here is some timely gallows humor.

1. The US has made a new weapon that destroys people but keeps the building standing. It's called the stock market - Jay Leno

2. Do you have any idea how cheap stocks are?? Wall Street is now being called WalMart Street - Jay Leno

3. The difference between a pigeon and a London investment banker. The pigeon can still make a deposit on a BMW

4. What's the difference between a guy who lost everything in Las Vegas and an investment banker? A tie!

5. The problem with investment bank balance sheet is that on the left side nothing's right and on the right side nothing's left.

6. I want to warn people from Nigeria who might be watching our show, if you get any emails from Washington asking for money, it's a scam. Don't fall for it - Jay Leno

7. Bush was asked about the credit crunch. He said it was his favourite candy bar - Jay Leno

8. The rescue bill was about 450 pages. President Bush's copy is even thicker. They had to include pictures - Jay Leno

9. President Bush's response was to meet some small business owners in San Antonio last week. The small business owners are General Motors, General Electric and Century 21 - Jay Leno

10. What worries me most about the credit crunch, is that if one of my cheques is returned stamped 'insufficient funds'. I won't know whether that refers to mine or the bank's

New Stock Market Terms

CEO -- Chief Embezzlement Officer.

CFO -- Corporate Fraud Officer.

BULL MARKET -- A random market movement causing an investor to mistake himself For a financial genius.

STOCK ANALYST -- Idiot who just downgraded your stock.

BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets No jewelry.

VALUE INVESTING -- The art of buying low and selling lower.

P/E RATIO -- The percentage of investors wetting their pants as the market keeps Crashing.

BROKER -- What my broker has made me.

STANDARD & POOR -- Your life in a nutshell.

STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.

FINANCIAL PLANNER -- A guy whose phone has been disconnected.

MARKET CORRECTION -- The day after you buy stocks.

CASH FLOW-- The movement your money makes as it disappears down the toilet.YAHOO -- What you yell after selling it to some poor sucker for $240 per share.

WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.

INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.

PROFIT -- An archaic word no longer in use.

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