The Fight at the Bottom: S&P 800

There is a real tug of war going on right now: the battle for the market bottom.  Much prevailing wisdom saying there is a lot of support for the S&P 500 at around the 800 mark.

The market is cris-crossing back and forth over it right now.  If we can stay above that at the close, it may be a bear market rally of 10-15%.  If it closes or dives below, we may retest the market lows of November before the turn.

When will all this uncertainty end?  Answer: no time soon.

In the 1970s when we went off the gold standard and inflation ate away at purchasing power, the typical American household became a 2 wage earner reality to pay the bills.  In the 80s and 90s, our savings rate went to zero as we spent more and more of our available income to keep up our standard of living.  In this century, we have moved to deficit financing to keep the party going.

What is left?  How is the American consumer, 70+% of our economy and 40+% of the world economy going to “get things going again”?

Answer: no time soon.  Prepare for, in the words of our new President, a “lost decade” my friends.

To show you where my head is at, the most recent additions to the clutter on my desk are 2 boxes of shotgun shells and the 10 oz of Platinum that I bought back in Dec (finally delivered … now worth 35% more than I paid for them).

Like Hunter S Thompson once said, “When the going gets weird, the weird turn pro.”

Later…

S&P 500? Will The Market Continue Down?

I wanna keep this light but … it’s kinda tough when there is so much non-growth oriented (see, I avoided saying ‘negative’) news on the economy.

I have been looking for a bounce in the stock market, maybe back to 1000-1050 in the S&P500 index.  It is looking like a tough fight as the overall trend in the market is down.  One of THE most important things you can learn as an investor is (memorize this):

YOU MAKE MONEY IN THE STOCK MARKET BY INVESTING WITH THE DOMINANT TREND IF YOU INVEST AGAINST THE TREND YOU WILL LOSE MONEY.

The we are in mess started with real estate and real estate has to start a recovery for us to be heading back to an even playing field.  And real estate market is not coming back anytime soon.  I know a lot of Realtors (I am a Broker myself).  Most of them are good people.  They made good money in the boom.  Nearly every one is hurting now.  A good number of them think properity is just around the corner….NOT!

Thank you Mr. Hoover but, I don’t think so.  Futures are looking like late 2010, maybe even 2011 before that happens.  Sometime preceding that is when the stock market will have truly bottomed and a new bull will begin.

The S&P500 COULD really get to 500 before all is said and done.

Look out below.

How Much is a Trillion?

The Reality of Inauguration Costs

There was a lot of chatter yesterday - and a recurring subtitle on network TV - about the costs of the Obama inauguration being estimated at $150M to 170M.  Of course in this time of economic challenge this is looked upon as unsavory and gives the Obama naysayers something to complain about.

Get real.

If you add the $850B cost of the proposed stimulus package to the $1.2T already allocated to bailing our ass out of this mess, you come up with a bump to the national debt of another 2 TRILLION DOLLARS.  Well boys and girls, those of you that sit at the front of the class know that we as a country have to pay interest on that debt as we sell off Treasury bills to foreign governments and others.

Even at a 3% annual rate of return, that $170M is just over 1/30 (0.034) of what we have to pay EVERY MONTH to finance the debt we are taking on to bail out the mess we call our economy.

If you want to get mad about something, get mad about that.

Recession Proof Your Life Part 5

This is the 5th and final installment of my series on Recession Proofing Your Life.  In this blog, I talk about where you really want to be going in the long(er) run and that is owning your own business, the statistically best chance for you to become a millionaire.

Part 5 – The Real Opportunity

In my wealth coaching practice (a hybrid of business and life coaching), I have talked to any number of people – peers and clients – who have said “losing my job was one of the best things that ever happened to me.” ‘Why is that?’ you might ask. Because it forces us to re-evaluate our job situation and, hopefully, the rest of our lives. We all too often get weighed down by “what is.” What we’re used to, the status quo, not rocking the boat, etc. Often, we attach far too much importance to a J.O.B. and rely on them not only for our self esteem, but as the focal point around which our lives are defined.  Some people are lucky and really love their jobs. The last I checked, the percentages who claimed this mythical status was in the low 20% of those employed for someone else (the number goes up significantly for the self-employed). In general, being an employee turns out to be better than nothing (quite often a true statement) and the path of least resistance.   In the current economic climate, the best job in the world could indeed be the one you have (last Friday’s unemployment numbers were the worst in years) so let me say this again: THERE IS NOTHING WRONG WITH HAVING A JOB.  However, in my experience, the employee route is typically - there are always exceptions - antithetical to growth and keeps us from our full potential as human beings. Read more

Entrepreneurship Is On Hold

I’m serious … I’ll write more about this soon but the realization just hit me that the approach I have been taking with clients and in my talks to various groups about being more entrepreneurial may be less appropriate given the current economic climate.

I’m going to have to think more about this …  stay tuned, check back soon, dont be a buffoon stay away from monsoons.

You don’t need a Weatherman to know which way the wind blows.

Indeed.