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Friday,
February 27, 2009
(Cont'd from
above)...
Jim (cont'd):
What about the money
that you don’t need
in the 4 ½ years…
remember, there is
such a thing as
asset allocation…
sure you can have
100% of your money…
cash… that has been
terrific for now…
you can keep it all
in gold and
treasuries and
municipals… hey,
that has been
fabulous… for now…
and while I don’t
ever recommend short
selling on this
show… you could have
a lot of short
positions….
terrific, for now…
hey anyone who
bought zero coupon
T-Bonds in 1981,
would have far
outperformed the S&P
500 over the last 29
years… who would
have thunk it… a
bond… who would have
thought of it other
than my good friend
Bert Dohleman from
the Wellington News
Letter… I don’t
know… but what about
later… there will
come a time perhaps
substantially lower
from here when
stocks will work
again… we are not
there yet… if you
have some long term
money, you don’t
want to miss the
turn… the stocks
that you own should
be defensive and
should be
diversified… and
mixed with a healthy
dose of gold and
cash… two Obama
proof assets, at
least for now… and,
of course, nothing
is Obama proof that
is how dreadful it
is.
What is still
defensive… think
about the
necessities, what
people and
governments have to
spend money on in
order to exist… that
is where you will
find the eventual
survivors… that
doesn’t mean that
right now these
stocks are cheap… it
doesn’t mean that it
is okay to go buy
Proctor & Gamble
hand over fist, that
has been a big
mistake… competition
has never been more
fierce… consumers
are feeling
squeezed… so they
squeeze the
retailers, who in
turn squeeze the
suppliers… it is a
trade down
environment…
everything that is
high end has been so
unbelievably
decimated… so that
means that you want
Wal-Mart (WMT*),
or
McDonald's
(MCD*)…
or a private-label
food company like
Ralcorp Holdings Inc. (RAH)
or
Treehouse Foods Inc. (THS)…
all of those are
better than Proctor
& Gamble… and the
government… well,
let’s just say… if
it can buy less of
or pay less for
something… from now
on it will… that is
certainly not the
way it used to be…
that is why the
health care names
have been destroyed,
decimated by Obama
care… and will get
decimated again… it
is also why I worry
about defense
contractors like
General Dynamics (GD),
and
Lockheed Martin (LMT)…
which shed an
unbelievable 5
brutal points today
because people don’t
trust Obama who own
defense stocks.
And let’s not forget
that money comes in
strange forms… since
the year has began
we have had a
wonderful bull
market in gold… is
that off limits
because it isn’t a
stock… where does it
say that this is Mad
Stock Money… when
gold is happening do
I have to call the
show Mad Bouillon
Money… or how about
oil… when it gets
clogged too much,
why can’t we make
money in those
names… like the
Permian Basin Royalty Trust
(PBT),
the Permian Basin…
even as Obama is
saying, let there be
blood in oil stocks…
sure we have to be
nimble, but money
can be made…
consider it a mini
bull… a calf even…
or even a veal
market… make mine
Marcellius… if you
buy
Transocean Inc. (RIG)
and you make a few
smackers… do you
think the bank says
wait a second pail,
did you make that
RIG in a day, no
thank you, we don’t
take trading money…
is that what he
does.
Fertilizer… we have
been recommending
Terra Nitrogen Company, L.P.
(TNH)
for months… it is
almost double with a
huge dividend…
should that bull
market be avoided
because it smells
like fertilizer… how
about today… when
the market opened
up… when it opened
down, it looked like
a typical garden
variety sell off…
but if you bought
into the ugliness
for some pretty good
names that we have
been liking like
IBM (IBM)…
you made some money…
two stocks we have
pushed endlessly
made a lot of sense…
McDonald's
(MCD*)
at $51.50, it jumped
up more than a $1...
and IBM, wallowed at
$88 in the first
hour of trading, and
then zoomed to
$92... you watch
this show… you can
get these gains… and
with low
commissions, they
are worth it.
The bottom line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
Yes, the market is
horrible,
insufferable,
miserable,
nauseating,
repulsive,
obnoxious…
positively… ready…
Madoff like… but you
don’t have to own
stocks… in fact you
should not own them
with any money that
you will need in the
next 4 ½ years… you
can make money in
gold… you can trade…
and for the long
term you can own the
stocks of companies
that make things
that people and
governments need…
but only when the
smoke clears, the
competition has been
wiped out, and the
stocks are so cheap
that the sellers
have finally
disappeared… it has
happened before… it
will happen again…
and we will continue
our hunt for the
bull markets every
where we can find
them.
Consider taking any
money you need for
the next four and a
half years out of
the market, but for
the long-term
consider necessities
and until the clouds
clear, you should
continue to practice
defense...
Alright, now matter
how ugly it gets… it
will eventually get
to a level where the
selling is exhausted
and the bulls will
come back… in the
interim, don’t
forget gold, don’t
forget cash, don’t
forget a little oil…
and certainly don’t
forget to trade.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
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Q:
This week you did a
segment on the
technical indicators
that predict a rally
in the market, my
question for you is,
what additional
catalysts, maybe
from Washington, to
spark this rally?...
Jim:
Now remember, I am
not necessarily
looking for a rally…
some of the
technicians are… I
think that what you
would get from
Washington… well,
Tim Geithner’s
resignation would
immediately mean
about 500 points…
but we are not going
to get that… hey,
how about the way
that he destroyed
Citigroup… hey, you
know what he did, he
called a bunch of
reporters, he gave
each one of them a
different story,
nobody knows what
there is, including
like people I know
who work at
Citigroup, the top
didn’t know… but
what we need to see
form government is
some clarity that
they are done
destroying things…
maybe even a
pullback… maybe even
Obama saying, hey
you know what we are
done for now, we are
going to just look
at things… boy I
tell you something,
Obama going to Camp
David for about 3
weeks wouldn’t hurt
either.
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Q:
Every day I wake up
and I see the Dow is
down, and I see the
S&P is down, and I
don’t even think the
S&P and Dow are good
gauges for the stock
market, or for the
business community
anymore. And my
question really is,
given all the
turmoil in the S&P
and the Dow over the
last 6 months. Do
you think
intelligent
investors be paying
so much attention to
those two indexes?
Or do you think
intelligent
investors be paying
more attention to
the Wilshire or the
Russell?
Jim:
You make a lot of
sense… and I have
got to tell you that
I happen to be stuck
in portfolio
manager-eese when I
was a hedge fund
manager… you always
had to bench mark,
this quarter I was
up vs. the S&P and
vs. the Dow… we
should be thinking
bigger particularly
because the Dow is
now a challenged
index given the fact
that there so many
stocks in there
below $10... the S&P
is still
representative… but
you are right, we
should be thinking
about all of them…
NASDAQ is doing much
better than the
others… I am being
too... and I will
try to work some
others in… but I
thank you for that…
thank you very much.
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Q:
I am a new investor,
and I see that this
is an opportunity of
a lifetime, and I
have been looking to
get it. What advice
do you have for a
new investor?
Jim:
Alright, I want you
to do it slowly… I
want you to do it in
a way so that if you
were to buy… I want
you to think of it
like this… let’s say
that you were to buy
Verizon
(VZ),
$28... and you
bought all 100 right
here at $28... and
then it goes to
$25... I don’t want
you thinking, wow… I
want you to buy in
stages… I want you
to buy your first 25
shares right here,
if the Dow Jones
goes to 6500... you
buy another one… I
am telling you I
want you to get your
feet wet, I want you
to put your toe in
the water… I don’t
want you to do it
all at once… because
I am afraid that you
will get beleaguered
and jump out…
because that is what
people are doing.
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[verbatim recap]
[end of segment]
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