Peter Dag & Friends: March 2009

3/30/09

Obama speaks and the markets tank. Is he confusing the markets?

...and fires the chairman of GM. The government is taking over the auto industry(about 10% of GDP) and trying to fix the housing sector (another 10% of GDP). The government is becoming a really big player.

On Sunday he met with top financial executives. I wonder who said what to whom. My sense is that the executives have more knowledge of what is happening than the administration.

On Monday, after the meeting, the market slumped (click on graph to enlarge). The trend is down, no doubt about it. Did the executives gave the order to sell after the meeting with the President?

Meanwhile, U.S. Treasury Secretary Timothy Geithner said some financial institutions will need substantial government aid, while warning against any attempt to tax investors who join a federal program to buy tainted assets from banks.

Some asset classes, however, keep providing positive returns.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/. You can review The Peter Dag Portfolio, free of charge of course. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

George Dagnino, PhD

3/28/09

A strong market...time to relax as China keeps challenging us

China is challenging the USA.

"Facts speak volumes, and demonstrate that compared with other major economies, the Chinese government has taken prompt, decisive and effective policy measures, demonstrating its superior system advantage when it comes to making vital policy decisions," Zhou said in remarks posted on the People's Bank of China's Web site.

The market soared. The Fed prints money at a dizzying pace. The world economy is sinking. Investors are confused as volatility remains high.

Well, it is time to relax and listen to one of the major contemporary sopranos in a delightful aria by Puccini. Enjoy and forget for 2 short minutes what is happening out there.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

3/27/09

Up or down? Buy or sell?

Is the market going to go up or down?

My answer is, and I know some people do not like it, “What is your investment strategy? What are your assumptions?” This is when their eyes glaze over and I know they do not value my questions.

There are several ways to answer. These are different times. They are difficult because people do not attempt to understand them and act upon their understanding.

There is a huge deleveraging going on and an immense transfer of wealth and power from us to the bureaucracy. Your investment strategy has to recognize and deal with this – whether you like it or not.

Forget about the clichés of buy-and-hold, long-term investing, indexing, averaging down, diversification. I always maintained that these are formulas doomed to failure. These times are proving the correctness of this view. Risk assessment and timing are the keywords.

Your portfolio has to reflect the current times, not yesterday’s environment. And flexibility has to be the main theme. This is a deflationary economy, not an inflationary one. Some think inflation will rise. Eventually. Maybe. No one knows what will happen in one or two years.

What you know for sure is what is happening today. Act accordingly. Forget about yesterday’s markets. We are facing a new environment that is likely to last several years. And above all, listen to the markets. When they change, you will have to change.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

3/26/09

The war on terrorism continues.... that we like it or not

President Barack Obama plans to send 4,000 more U.S. troops to Afghanistan in an effort to confront the threat posed by the Taliban and al-Qaeda there and in neighboring Pakistan, administration officials said.

Obama is set to unveil his new strategy for the eight-year- old conflict in Afghanistan tomorrow. The goal is to disrupt, weaken and ultimately destroy havens and support for al-Qaeda, whose leaders, including Osama bin Laden, are now in Pakistan and plotting new attacks against the U.S., the officials, who briefed reporters on the plan, said.

Bottom line. The more things change, the more they stay the same. What happened to "change"? The policy of any administration has to be to protect the country. War is a necessity, not a choice, because we have to protect our interests.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

The dollar

The dollar is at an interesting juncture from a technical viewpoint (click on the chart to enlarge).

First. The greenback seems to be going through a nice double top.

Second. The dollar has declined from a very important resistance level and some technical indicators reflect a serious loss of momentum.

Third. The blue line is an important support. A break on the downside could imply a major decline is in the cards. Is this what the strength of commodities is predicting?

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

Observations

When I first arrived in the US, I found New York somewhat disappointing. Some streets were dirty. Some people were poor and badly dressed. Everybody and everything looked quite average. I surprised myself thinking, “How could these people win the war?” I was brainwashed by the American propaganda machine in Europe.

It was too early for me to know about the amazing American work ethics and entrepreneurship, the immense resources and wealth of the country with few restrictions on what anyone could do. One more thing impressed me. Americans were working to pay the banks. The banks owned them.

Fast forward a few decades. Why do we have a crisis? Since winning WWII America has been the strongest, the wealthiest, the most powerful country in the world. Its resources and reach were immense, dictating what should, or should not, be done to the rest of the world. Its people were constantly reminded of this truth.

For decades, people were encouraged to enjoy their unique place in history. They believed all the clichés coming out of Washington. Growth was the name of the game. Growth, however, does not come from complacency. It comes from the capacity of producing goods efficiently.

It was much cheaper to buy goods from others. People have been lead to believe it was OK to “hire” underdeveloped countries to produce what we needed. To compensate for the eventual decline in economic growth, we had to leverage. We were brainwashed to do it because we are the strongest and most powerful. The kind of mindset GM had when it controlled more than 50% of the car market. Now it is skirting bankruptcy.

The solution is not to encourage more leverage. We need to concentrate on re-building our industrial base. Populist social programs only transfer wealth to the bureaucrats. The markets always win.

From California to New Jersey the states have to retreat from the lavish promises they made to their citizens. The markets will painfully force us in the right direction. The alternative is stagnation, the lukewarm growth plaguing Europe.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/25/09

New home sales

Sales of new one-family houses in February 2009 were at a seasonally adjusted annual rate of 337,000. This is 4.7 percent above the revised January rate of 322,000, but is 41.1 percent below the February 2008 estimate of 572,000.

The median sales price of new houses sold in February 2009 was $200,900; the average sales price was $251,000, down 20% from last April.. The seasonally adjusted estimate of new houses for sale at the end of February was 330,000. This represents a supply of 12.2 months at the current sales rate.

Bottom line. In spite of these good new, sales are in a major downtrend (click on chart to enlarge) and prices are slumping.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/24/09

Thoughts from Nobel Prize winners

“The real problem with this plan is that it won’t work,” Krugman (the newest laureate) said in his New York Times opinion column.

Geithner appears to be going back to the “cash for trash” approach of his predecessor as Treasury Secretary, Henry Paulson, Krugman said. “This is more than disappointing. In fact, it fills me with a sense of despair.”

The Treasury plan “is a little complex to implement,” Spence (co-winner of the 2001 Nobel Prize in economics) said. “I assume the Treasury has done its homework, and has people lined up” to commit private capital to Geithner’s public-private partnerships, he said.

“This program is crucially dependent on the private sector as participants and price setters,” said Spence.

The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday.

"The Geithner plan is very badly flawed," Stiglitz told Reuters in an interview during a Credit Suisse Asian Investment Conference in Hong Kong.

Bottom line. The plan is not a sure thing. We know, however, that the markets will eventually win. We will know "if and when" from the trends of our indicators.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/23/09

Exciting day!

Really? Making a lot of money. Geithner talks. Markets soar. Dollar and gold down. Oil up. Bank stocks go through the roof.

Question: is it normal? I would say scary.

On 3/12 we sent a Market Update to our clients telling them the market would go up. Enjoy the momentum, make money, but do not become greedy. It is an outrageously risky environment.

Why are low grade bond yields rising in spite of all the euphoria?

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

A "new" plan. Old ideas.

After much criticism to the Paulson's plan and the need to bring change with new ideas, the Obama administration’s bank rescue plan is no big change.

Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.

Bottom line. The more things change, the more they stay the same. The good news is that the market reacted favorably to the news. Time to make money, as I told my subscribers on 3/12.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/20/09

Another week...making money ... and relax....

The market is up 1.6% this week. Turbulence in financial stocks. Up, down...wildly. They seem to be willing to go up. Bonds are acting well thanks to the Fed and a weak economy. The dollar tumbled. Investors seem to like the reflationary play. I do not feel comfortable with the idea. Why? Because the global economy is tanking as shown in our The Global Business Cycle.

Washington, meanwhile, does not have a clue on what to do. So, they go after bonuses. Really crazy.

What should we do? It is time to relax. Debussy has a way to make you dream. Enjoy!

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

About commodities

There is a big hype about commodities these days. Oil, gold, just about everything. The indicators, however, show the commodity complex has been flat since the end of last year (click on chart to enlarge). I just do not see oil at $100 by May as some smart traders are suggesting.

Well, call me old fashioned, but commodities rise when the economy is strong. Very strong. Usually growing at above the average 2.7% average pace. Is the economy that strong? And please, do not remind me that China exists because the Chinese economy is tanking in a pitiful, painful way like every other country on the globe.

The business cycle has a way of asserting itself and make sense of just about everything. Worldwide.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/19/09

More nonsense from Washington

I just cannot resist. Evidently Washington does not know what to think. Their shallowness is reflected in the big deal they are making out of the AIG bonuses while Obama is fiddling in California and Rome is burning!

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

I just cannot resist.....

With all the problems the country and the global economy have, it is utterly incredible our government wastes so much time on the AIG saga. Are these the people in charge of our future?

What happened to the Treasury secretary? Have you seen him lately? Why is Obama talking in his behalf? Why is Obama travelling so much instead of staying in Washington and running the country? Did we vote for him to give speaches or to lead?

Incredible!!!

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/18/09

Do not fight the Fed

With the country sinking deeper into recession, the Federal Reserve launched a bold $1.2 trillion effort Wednesday to lower rates on mortgages and other consumer debt, spur spending and revive the economy. To do so, the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

The decision to hold rates near zero was widely expected. But the Fed's plan to buy government bonds and the sheer amount -- $1.2 trillion -- of the extra money to be pumped into the U.S. economy was a surprise.

Bottom line. It looks and feels good. The market rallied. Do not fight the Fed. My suggestion? Buy the same assets the Fed is buying.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

New trend in gold stocks?

Gold stocks are at an important juncture (click on graph to enlarge). The first thing to notice is strong volume after a protracted advance followed by a decline. Strong volume in this case is bearish for the sector.

The downtrend line needs to be violated on the upside for the current correction to end. Time will tell.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

Crude oil is at an important juncture

The technical position of crude oil is very interesting (click on graph to enlarge).

$50 is a crucial level. Crude is hitting two major lines at this level. A downtrend line (in red) which has been in effect since July 2008. A break above this line could signal a major change in trend from down to up.

$50 is also a resistance level (blue line) in effect since last December. A move on the upside would confirm the change in trend.

The interesting question is: Is the strength in the price of oil signalling that the global economy is in much better shape than we think?

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/17/09

Has crude oil bottomed?

Because of the recession of 1980, crude oil declined close to 63% in 66 months. In the recent recession crude suffered the same percent loss but in just 7 months (click on graph to enlarge).

This kind of debacle suggests crude may be much closer to the bottom than the top. The main issue is whether crude is able to rise during a severe global recession. Time will tell.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/16/09

It is important to have an investment process leading to an investment strategy

Those of you who follow my presentations and what I write know I firmly believe a buy-and-hold strategy is bound to increase portfolio risk and provide disappointing returns.

This is particularly true if you happen to live in one of those market stretches when stocks go nowhere. These stretches include the periods 1929-1940, 1968-1982, and the current one 1997-2009.

The long term does not exist. Buy-and-hold is a concept that has been sold by people who do not understand financial history. Or, they try to make their life easier by finding an effortless way to invest.

We have been going through a period proving this point quite clearly. Investors have to adjust their portfolio according to an investment process fitting their personality and the time they are willing to devote to managing their money.

No one can forecast the demise of a Lehman Brothers as it happened last September. Yet, folding and leaving the table is the wrong approach to managing your money. Gradualism and adapting your holdings to the latest trends is one approach.

Our process is based on the idea that the business cycle affects the return of asset classes. When business grows slowly, we invest in sectors doing well during such times.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/14/09

I thought you might be interested to know....

I have been ranked No.1 market timer by Timer Digest for the three months ending 3/6/09.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

Finally...a great week...time to relax

Finally, after a loss of more than 24% since the beginning of the year, the market jumped 10.7% last week.

Since the beginning of the month, the 3 strongest sectors were those you would expect to be strong in a weak economy ...

And now it is the time to relax and take our mind off the market for two days ....SMILE.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/13/09

About long-term investing

Those of you who follow my presentations and what I write know that I firmly believe that a buy-and-hold strategy is bound to increase portfolio risk and provide disappointing returns.

This is particularly true if you happen to live in one of those market stretches when stocks go nowhere. These stretches include the periods 1929-1940, 1968-1982, and the current one 1997-2009.

No one can forecast the demise of a Lehman Brothers as it happened last September. Yet, folding and leaving the table is the wrong approach to managing your money. Gradualism and adapting your holdings to the latest trends is one approach.

My process is based on the idea that the business cycle affects the return of asset classes. When business grows slowly, we invest in sectors doing well during such times.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/12/09

Observations

I believe the history of humankind is a random event. People push and shove until they have a system they think can resolve their problems. Only to become disappointed and slowly change again toward a different system. I am dedicating a large part of my time to thinking about this issue.

Are Chinese, Venezuelan, Iranian, or Russian autocracies better than the democratic ones? We think we are the model. But we are also changing as we seem to be moving away from a liberal system.

No system is stable – capitalistic/liberal or autocratic. China, under communist dictatorship, is using capitalistic ideas with the command performance rather than the cumbersome and lengthy democratic process. Some observers say autocracies represent an improved version of capitalism.

Can an autocratic system survive? My answer is no. No system can survive as is. Power groups within a nation will always try to gain control of the wealth of the nation. See for instance trends in Iran.

Power groups will fight until they control other power groups or absorb them. The fewer power groups, the slower the growth of the economy. It is an unquestionable fact. Look at what happens in Iran, Russia, and Europe.

When people become dissatisfied, they force the group in power to change its policies to solve their problems. Italy and Germany accepted dictators in the late 1920s.

In Italy the power groups have consolidated their reach and this is the reason the country has been in shambles for decades. Once a power group is in power, it is not going to relinquish it without a revolution. This is what triggered the French revolution or the USSR debacle.

There is no democratic, liberal, or autocratic system. All the systems are constantly changing. Like birds, we fly trying to find the ideal resting place. What we find is new problems. There is no ideal system. We are randomly searching for a system that does not exist.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/10/09

Gold ... I told you so

Gold prices tumbled Tuesday, closing below $900 an ounce for the first time in a month, as investors returned to Wall Street in force on news that troubled Citigroup Inc. has been operating at a profit.

For what to look for see the post of 3/3.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

WOW! The market is soaring.

What should you do? My emotions are pushing me to jump in. Am I missing something big? Is the market finally bottoming? My greed is trying to make me act and buy, buy, buy....

Common sense and knowledge of history are telling me that market bottoms are a process. Not a one day affair.

My suggestion? Take a deep breath and wait for the market to settle down (if this is really a tradable bottom).

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/9/09

....and the transportation stocks keep sinking

Is anyone noticing the sharp decline of the transportation stocks (click on graph to enlarge)? I do not think their trend is a harbinger of good things to come.

Transportation stocks are very sensitive to economic growth. These companies carry goods to the marketplace. The fact that these stocks are sagging shows the economy is in deep trouble.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/7/09

I just could not resist .....

I know, it is a week-end and we should relax and not think about the markets. But I was surfing the web and found this very interesting graph that I thought you might be interested in. It shows how this bear market compares to all the major bear markets around the world, including the US great depression.

Just click here to view it. Please note the tabs above the graph.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/6/09

Another bad week in stocks ....time to relax

The Obama bear market goes on, down 28.2% since November 5. Relentless.

What worries me is the weakness of the transportation average, which is down 37.4% since the beginning of the year.

We have two days to relax. Enjoy this short piece by Ravel...

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

The economy is weak...but there are good news

Nonfarm payroll employment continued to fall sharply in February (-651,000), and the unemployment rate rose from 7.6 to 8.1 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today (click on graph to enlarge).

Payroll employment has declined by 2.6 million in the past 4 months. In February, job losses were large and widespread across nearly all major industry sectors.

The Obama bear market is relentless. Since the beginning of the year, in just more than 2 months, the S&P 500 sank 24.4%. Yet, there are investments providing a yield of close to 5% or higher and showing gains in 2009.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

Question about investment strategy

Most major central banks are thinking or are buying "bonds" to facilitate the growth of credit in their country.

Question. What is the safest asset class to buy in these turbulent times?

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

Is the market close to a bottom?

Peter Dag & Associates have made a substantial effort in developing technical indicators used to predict the bottoms and tops of the market.

Some of them are used to predict the direction of stocks over several weeks. Others, as the one shown here (click on graph to enlarge), to predict market risk of a period of several months.

We also have fundamental measures using data about bond yields, employment, monetary growth, financial risk to predict the beginning and end of major bull markets.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/5/09

The markets always, always, always win

The markets do not like what is going on in Washington. This is the simple truth. I do not not exactly what the current administration is thinking or planning. But as a long-time observer of the market, I learned a few things.

The markets are saying this administration is a danger to capital, to capitalism, and to free market.

But do not despair. The markets always win. You just have to learn how to listen to them.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

Not a pretty picture

Financial stocks are plunging. Not a pretty picture for financials or for the overall market.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

Update from the Fed: bad news (if you believe them)

The battered U.S. economy will continue to weaken over the coming months, with unemployment rising, top Federal Reserve officials said on Wednesday, though they remain confident that forceful policy action will help end the more than year-long recession.

Dennis Lockhart, president of the Atlanta Federal Reserve Bank, said it was hard to "be upbeat about the immediate future."

Richard Fisher, president of the Dallas Fed, said indicators show the economy to be on track for a decline in the first quarter roughly equal to the 6.2 percent annual rate of contraction seen in the 2008 fourth quarter.

Fisher, who characterized himself as the most pessimistic of all of his colleagues on the Fed's policy-setting Federal Open Market Committee (FOMC), said he fears the country might suffer two years of recession.

The current recession started in December 2007.

My point. They did not see that we were heading for a severe recession. How can you trust them now that they see the end of it?

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

Commodities and business cycles

Commodities rise when the economy is growing rapidly. They decline when the economy slows down.

Commodities have stabilized since the end of last year (click on graph to enlarge). They may signal the economy is not weakening anymore. Before reaching any conclusions we need to look at the trend of unemployment claims. A decline in unemployment claims would be good news. They are still rising, however.

My point is that we need more data points before becoming bullish on commodities.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/4/09

Do not get too excited by a 149 point move

The Dow jumped, but the bank stocks declined (click on chart to enlarge). Gold was sharply lower. Bonds were weak. The energy sector was strong.

Our trusted indicators will have the final say.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/3/09

Gold: interesting patterns

Gold (ETF:GLD) is at an interesting juncture (click on graph to enlarge). GLD is close to the important resistance level of 100.

What is even more interesting is that volume has soared as GLD spiked higher. This is a bearish pattern because it suggests distribution has been taking place.

A bullish pattern, signaling a bottom, occurs when GLD declines and volume soars, suggesting capitulation and accumulation by strong hands (as it happened in September-October).

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/2/09

An ugly trend ... a somber message

The trendline of the transportation average (click on the graph to enlarge) tells the whole story. Watch the trendline. It is the verdict of the market about what is happening on the political and economic scenes. Act accordingly.

The markets will decline until this administration changes his mind about its grandiose plans.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

The market and Washington

The relentless decline of the market is the final verdict on the changes concocted in Washington. Investors are scared by the the way the US will look like if the programs planned by this administration are going to be implemented.

The markets always win. Their verdict is always the right one. Wealth cannot be redistributed if it is going to be destroyed by unacceptable policies. The first step is to rebuild the wealth that has been wiped out. Otherwise discontent and more wealth destruction are going to be the outcome. This is the verdict of the market.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD

3/1/09

Another rough week...time to relax

The market had another rough week. It is reacting to Mr. Obama socialist and spending ideas. If it declines as much as the financials, insurers, health, transportation, auto stocks, it is likely to go down much further as pessimism spreads to all other sectors. I will continue to follow my trusted indicators to keep me out of trouble.

Meanwhile, let's relax. I dedicate this Pavane by Ravel to you....

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD