7/31/10

Good news for stocks?

News. More than half of the companies in the Standard & Poor's 500 have reported quarterly earnings, 304, and 75% of them have beaten earnings estimates. Meanwhile, 63% have beaten revenue forecasts, Thomson Reuters says.

The numbers are even better than usual. In recent quarters, 69% of companies have beat earnings estimates and 61% have topped revenue estimates


My view. These strong earnings reports should be good news for stocks in the coming weeks. Let's hope so.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/30/10

Correlations and investment strategies

News. The median correlation of stock returns is at an all time record high (0.82), according to Ned Davis Research and Birinyi Associates.

My point. If this correlation continues, investors should focus more on market timing and less on stock picking.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/29/10

What am I missing?

News. July 30 (Bloomberg) -- The Obama administration won the first round in its fight to stop Arizona and potentially more than a dozen other states from cracking down on illegal immigration. The battle ahead may prove more treacherous.

My point. I do not understand why we call them "illegal" immigrants when we cannot crack down on "illegal" immigration. Should we call them "unwanted" immigrants? But this is also not correct because we want them because we need them. Am I missing something?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Interesting patterns

Trendlines -- a useful tool. Just to help you keep the eye on the ball.

I showed you this chart a few days ago. The important trendlines are those spanning about 3 months.

The S&P 500 violated on the downside the trendline going from February to April. It signalled a change in momentum (click on the chart to enlarge it).

In July the S&P 500 rose above the trendline, signalling a possible change in trend. I discussed this pattern in an earlier post.

Now it looks like the market is on a rising trend. According to this simple rule, stocks should be in trouble if and when the S&P 500 falls below the green trendline.

It is just a conjecture of course. It is going to be interesting to see what happens.

Stay tuned. And for the latest timing signal, please read the recent issue of The Peter Dag Portfolio.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

A bearish view

Market insights from Jeff Saut of Raymond James:

I revisit asset allocation today because I think we are approaching a point where rebalancing portfolios may be in order. To wit, the June “closing highs” for the DJIA (INDU/10424.62) and the DJTA (TRAN/4369.71) were 10450.64 and 4467.25, respectively.

Currently, both averages are approaching those levels. Either both averages will break out above their June highs (a Dow Theory buy-signal), one will break out and the other won’t (an upside non-confirmation), or both will fail to close above their June highs (trouble).

Meanwhile, my proprietary intermediate-term trading indicator is still flashing caution, as are the stochastic and 12-month moving average indicators. That said, I have been constructive on the stock market since the beginning of July despite the parade of negative indicator events registered since the April peak.

My bullishness was driven by the most oversold reading since the “capitulation alert” of October 10, 2008 when 93% of stocks traded on the New York Stock Exchange made new annual lows. Regrettably, the extreme oversold condition that existed three weeks ago has now been largely erased.

Accordingly, this week shapes up as a pivotal week and I will be watching the action closely.”


My point. Momentum is an important indicator. Oversold and overbought are important gauges if they are associated with a change in momentum. Then play the trend.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/28/10

Observations

The worldly philosophers tried to tell us how a country should be organized. History proved them wrong – from Plato to Marx. Why? Because there is no solution. Government, wealth producers, and the rest of us struggle to gain wealth and power. When one group becomes the dominant player, crises erupt.

This is the time when economic growth stagnates and the country becomes restless. “Greek anger rises over austerity program”, Bloomberg reports. In other countries, “general” strikes are part of the political landscape. Governments give generously. The bondholders, however, need to be paid. But countries fail to generate the wealth needed to pay the coupon.

Taxes and austerity programs are initiated. Much of the generous benefits have to be paid back through a sleuth of myriads of new taxes. Purchasing power declines, generating discontent. This is the time when people revolt. Sometimes in a peaceful way. Other times violently.

In the US, we are different. More civilized. We have tea parties. But the meaning and implications are the same. It is a revolt. A complaint against the loss of purchasing power. Against the favored groups of society. The “tea party” is spreading around the country. It is a civilized way of telling Washington that something is deeply wrong.

Mr. Clinton took a jab at these groups rallying against taxes, big government, and government overspending. The fact that Mr. Clinton mentioned them in his speech means that the politicians are taking this development seriously.

What is confusing is that first we demand social security, Medicare, Medicaid, housing and borrowing subsidies, student loans, bailouts of car manufacturing, the financial system and unions, subsidies for education and lofty pensions for municipal workers, teachers, and union members.

Then we protest because the government is overspending. And the nonsensical fight for wealth and power continues until the markets identify the winners and the losers.

(This Observations appeared in the issue of The Peter Dag Portfoliio of 4/25/10)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/24/10

Thank you Timer Digest

Great!

I was ranked second best market timer over the past 12 months by Timer Digest.

My forecasts are regulalry updated every week.

To review the current and all previous issues of The Peter Dag Portfolio just click The Peter Dag Portfolio. The first month is free for new subscribers.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/23/10

A rigged game

European stress test results are streaming out and surprise, surprise, looks like most of them are passing. All but one of the 14 German banks passed - nationalized mortgage lender Hypo Real Estate Holding failed - while all four French banks tested passed. Results still trickling through but in Spain Cajasur has failed. That’s not surprising either, this is the church-controlled lender that panicked financial markets when it was seized by the Bank of Spain in May. All Spanish and Italian banks have passed the tests too. (Source: the WSJ)

My point. This is the reason I left Europe and moved to the USA. The game in Europe, any game, is rigged by the groups in power. The stress test is no exception.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Technical patterns

Interesting chart (click on the graph to enlarge it).

Trendlines are a simple and useful technical tool. Why? The longer time span violated, the more meaningful the violation of the trendline is.

The trendline shown in this chart shows that a trendline spanning 3 months has been violated on the upside by the S&P 500.

It may be a meaningful pattern. Time will tell, of course.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Bond returns

I devoted a whole chapter to bonds in my book Profiting in Bull or Bear Markets. How can you predict the return from bonds?

One idea. The higher the yields, the higher the return when yields decline.

Yields on high-yield bonds are still declining, providing superb returns for the readers of my The Peter Dag Portfolio. High-yield bonds have outperformed the market since March 2009 by a wide margin.

It was a great opportunity for those who believe that the business cycle drives the price of all asset classes.

Most investors are too focused on stocks and they do not recognize that other asset classes may offer safety and profit opportunities.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Technical patterns found in cyberspace

This is an interesting chart, predicting the trend of the market – up (click on the chart to enlarge it).

Let’s hope it is right. Time will tell.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/22/10

It is our money

News from Reuters. The International Monetary Fund canceled Haiti’s $268 million debt on Wednesday and approved a new loan worth $60 million to increase international reserves in Haiti, which was devastated by an earthquake in January. The fund said the new loan, which carries no interest until the end of 2011 and low rates after that, was not intended to add more debt but to help Haiti manage any volatility that could arise from large amounts of aid going into the country.

My point. It is our money. What is their incentive to use it sparingly?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Austerity times

News. July 20 (Bloomberg) -- Hundreds of residents of one of the poorest municipalities in Los Angeles County shouted in protest last night as tensions rose over a report that the city’s manager earns an annual salary of almost $800,000

My point. Countries and cities around the world are busy raising taxes to give a sense of sanity to there budgets.

The politicians, however, never cut their perks.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/21/10

Technical patterns

This chart is from stockcharts.com (click on the chart to enlarge it).

The message is clear. The S&P 500 declined below the 12-month moving average. The last time it happened was in 2008. The message is clear. Time to be cautious according to this indicator.

Time will tell.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Technical patterns

The market is at an important crossroad according to this pattern (click on the chart to enlarge it).

The S&P 500 has been in a downtrend since April. However, it has rallied quite strongly in the past several days and is very close to the trendline.

A move above the trendline could signal an important change in the trend on the market.

Time will tell, of course.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Off the cuff

News. (Reuters) - European companies in industries with low growth prospects such as airlines, retailers and utilities are set to seek more cost cuts to sustain profits and reassure investors in the absence of a strong economic recovery.

Valuations of companies have dropped as if an economic downturn was imminent, Thomas Teetz, equity strategist at HSBC said, and companies will have to attend to that greater nervousness amongst investors.


My point. PE ratios are likely to settle to much lower levels to reflect a slow growth economy -- and earnings -- in the next few years.

Could they go down to 5-10% instead of the much touted average of 16%? It would have major implications for our investment strategy.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/20/10

Bearish news

Since 1900, when the market is negative for both January and the first half, full-year returns have been negative 77 percent of the time, with a median loss of 11.7 percent.(Source: Standard and Poor's).

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/19/10

From a passionate observer of our system

This article was written by Mortimer Benjamin "Mort" Zuckerman (born June 4, 1937. He is a Canadian-born American magazine editor, publisher, and real estate billionaire. He is a naturalized citizen of the United States.

He has been the publisher and owner of the New York Daily News since 1993 and, as of 2007, is the current editor-in-chief of U.S. News & World Report. He co-founded Boston Properties, Inc., in 1970 and serves as the chairman of the board and director.

He wrote a passionate article evrybody should read. He makes some points we should all think about.

Just click here.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/18/10

About annuities

Is someone trying to sell you an annuity or are you thinking about buying one?

Stop!

Read this article in Forbes blog by clicking here.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/17/10

Interesting statistics

From Business Insider.

In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.

My question. Why do people want to work in the private sector when they can have all the benefits of working for the government? Isn't this what they are doing in Greece?

For more eye-opening statistics click here

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Observations

Why is the stock market rallying, when US banks are failing, the eurozone is in a mess, and China is tightening?

Our leaders, like all bureaucrats, do not have the capability of preventing crises. They are the ones who create them. Look at what happened to banks, Ginnie Mae, Freddie Mac, and the housing sector. Now they have nationalized them and are adding, on top of all that, the student loan business. The excuse is to cut costs and encourage good education. Can governments be so efficient? Or, is it social engineering? One thing they know. Print money because this is the only thing rallying the market – liquidity. This is the only real reason.

Why are bond yields still so low when everyone warns about inflation and the dangers of default?

Deficits represent an obligation to pay interest to the bondholders. We have to pay the interest, out of our own pockets. Look at the Greek tragedy. Our standard of living will continue heading down. Taxes and regulations are increasing. People are not hired. Income growth is the lowest of the past expansions. We just cannot afford higher bond yields or higher inflation. It would drive the country into a total collapse.

Why is the US dollar strong when there are so many concerns about the US deficit?

The dollar peaked in 2001 and declined 36% by 2008. It has been firming recently, but it is still 31% below the 2001 top. If the dollar continues to strengthen it signals there are more profit opportunities in the USA than in other countries. Since 2001, however, the dollar has been sold, suggesting that there were better opportunities in other countries.

Why is China’s stock market lagging the rest of the world?

China is still an underdeveloped country with $6,500 GDP per capita compared to our $46,000. The markets have a knack for saying the truth. It suggests that all the bullish stories coming out of China are not reflecting the real China.

(These observations appeared in The Peter Dag Portfolio on 4/11/10)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/16/10

Another thought of the day

The markets are tanking. They look really ugly...across the board. Even gold is sinking.

An ugly picture.

Are the markets trying to tell us something about the next election. Are they casting a vote on the efforts, successes, and failures of the administration?

Only time will tell.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Thought of the day

We have big problems facing us. Just look at what is happening to the dollar.

They will try everything from printing money to raising taxes. But the trends are in place and they will be difficult to reverse.

The economy will keep slowing and inflation will become deflation. The unemployment rate will stay at politically embarrassing high levels.

Printing money will not work. Eventually the government will be forced to do the obvious.

It has done before and it worked. Why? Because the markets always win.

I will discuss this issue in detail on the next The Peter Dag Portfolio.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/15/10

The verdict of the markets

The most impressive trend of the past few days?

The collapse of the dollar (click on the chart to enlarge it).

This is the verdict of the markets. This is what the international investment community thinks about the growth prospects of this country. This is what foreign investors think about making money in this country.

Could it be that they are concerned about the policies of the administration? Time will tell. But make no mistake. As for Greece and General Motors, the markets always win.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/11/10

Need to relax

Hello. I am going to take off until Thursday.

My idea of "recharging the batteries" is going sailing for just a few days. My boat is just like the one shown in this picture. I love it because it is my mental escape, even if every day I keep "wired" to the markets.

Have a nice week-end and see you Thursday.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

More of the same

News from CNBC.

Congress, at the eleventh hour, passes an extension of the closing date on the home buyer tax credit.

My view.The housing lobby is the power group largely responsible for the mess we are in. They convinced the politicians everybody needs to own a home -- even if they do not afford it.

They keep pushing the political levers to generate more business. People ask. Politicians give our money to the most influential power groups. This is how the world works. Until the system falls under the weight of debt, government bureaucracy, and regulations.

Just look around you. We are running desperately trying to fix yesterday's problems. But the influential power groups remain more dominant as ever.

There is nothing we can do about it. Until the crisis forces us to start from scratch. We are close to that point in time as I discuss in my The Peter Dag Portfolio.

This is the real lesson of history. This is the reason we do not learn from history. Because it is not in the interest of the influetial power groups of the time.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/10/10

I am sure they mean well ....

... but it smells like a bureaucratic mess.

From Carpe Diem.

Section 342 of the Dodd-Frank Bill Will Impose Gender and Racial Quotas on the Financial Industry; Even Though Frank's House Committee Itself is 82% Male and Dodd's Senate Committe is 96% Male

Here's something that has great potential to ruin your day, from Diana Furchtgott-Roth:

"Section 342 of the Dodd-Frank financial regulation bill declares that race and gender employment ratios, if not quotas, must be observed by private financial institutions that do business with the government. In a major power grab, the new law inserts race and gender quotas into America's financial industry.

In addition to this bill's well-publicized plans to establish over a dozen new financial regulatory offices, Section 342 sets up at least 20 Offices of Minority and Women Inclusion. This has had no coverage by the news media and has large implications.

The Treasury, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the 12 Federal Reserve regional banks, the Board of Governors of the Fed, the National Credit Union Administration, the Comptroller of the Currency, the Securities and Exchange Commission, the new Consumer Financial Protection Bureau...all would get their own Office of Minority and Women Inclusion.

Each office would have its own director and staff to develop policies promoting equal employment opportunities and racial, ethnic, and gender diversity of not just the agency's workforce, but also the workforces of its contractors and sub-contractors."......


My point. I sincerely hope they know what they are doing.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Time to be bullish?

News from Barron's

Investors' Sentiment Falls to March '09 Level (7/9/2010)

Bears top bulls by 3-to-1 in latest investor surveys, a significant ratio for a sentiment-driven market, reports Barrons.com's Bob O'Brien.


My point. The insiders' transaction ratio (also published in Barron's) is at bullish levels.

There is no question that pessimism has reached extremely high levels. The majority is typically painfully wrong at important turning points in the market. As it was wrong in March 2009. Let's hope so.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/9/10

Technical patterns

I showed this chart several days ago (click on the chart to enlarge it).

The point was that GLD (GLD is the ETF for gold) was hitting against $122, and important resistance level. GLD could not rise above this level.

Why? One reason could be the strength of the stock market. On the other hand GLD could be trying again to rise above $122.

It looks like $122 is an important level and it pays watching it carefully.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/8/10

A bullish and a bearish view



Click and enjoy. And if you do not see the interview just refresh the screen and click again,

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Thoughts of the day

I hear many ideas on what to do about all our problems.

Why? Why do we have so many exceptions? Why are we being treated differently in the eyes of the government whether you are a union member, a government employee, city employee, rich, poor, married, single, teacher, professor of state colleges, large banks, small banks, government financial institutions, housing sector and financing, ....

Aren't we all equal? Why do we make so many different remuneration schemes, pensions, insurance, and taxation? Based on "access" to power?

I just do not understand why we have so many regulations and exceptions to anything we do. Why do we make our life so complicated until the system stops and does not work anymore?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/7/10

Just heard it on CNBC

The stock market and the economy are two different things.

I could not disagree more. The economy drives earnings and earnings drive stocks.

A stronger economy is followed by higher interest rates, higher commodities, and higher earnings.

A weaker economy is followed by lower interest rates, lower commodities, and lower earnings.

I am firmly convinced the business cycle drives the price of all asset classes. The charts supporting the above statements are reviewed in each issue of my The Peter dag Portfolio.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Thought of the day

Did you notice that, more often than not, the market is strong when the dollar is weak and the market is weak when the dollar is strong?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/6/10

Some ideas for SNS

I had lunch with a friend, SNS, and he was telling me that he was thinking about implementing an investment strategy emphasizing income stocks.

I suggested proceeding slowly. I was surfing the "I" and I came across this great article by Morningstar showing some useful suggestions(click here to read the whole article -- strongly recommended).

Good reading!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Question

Volatility (ETF: VXZ) has been hitting resistance on above avaerage volume (click on the chart to enlarge it).

This is an important pattern to follow. Why? Because declining volatility is associated, more often than not, with rising stock prices.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

A bearish view from a smart money manager

From the Weekly Market Comment of Dr. Hussman of the Hussman funds.

"Based on evidence that has always and only been observed during or immediately prior to U.S. recessions, the U.S. economy appears headed into a second leg of an unusually challenging downturn.

....the U.S. economy is most probably either in, or immediately entering a second phase of contraction."


My point. If he is correct, this outlook is bullish for bonds and income producing assets. Bearish for equities and commodities.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/5/10

Should we do the same thing?

News from Forbes. Prime Minister Viktor Orbán [of Hungary] has unveiled an economic program to get the country moving again. Foremost will be the introduction of a 16% flat tax on personal income, starting next year. Hungary's labor taxes have been among the highest in Europe--which is really saying something. The corporate tax for small and medium-size firms will be slashed from 19% to 10%, and other levies on small businesses will be eliminated. Charitable donations will be tax free. Public spending will be cut, as will the salaries of most bureaucrats.

My view. Why not. Everything else sems to be failing.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Bullish on junk-bonds

News from Bloomberg. Gross has been buying U.S. government debt, increasing it to 51 percent of his $227.9 billion Pimco Total Return Fund in May from 36 percent the previous month. For his personal portfolio, Gross disclosed in securities filings that he spent $8.1 million during May to buy shares in three Pimco funds that invest in bonds or bank debt issued by high-yield companies.

My view. He might be right. Time will tell. I just wanted you to know.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/3/10

Observations

Because of the publication schedule, I have to work on weekends. The report is completed by early Sunday afternoon. This is the time I jump in the car and drive to Annapolis where I have my boat.

Last weekend it was a chilly 40 degrees. But the boat is the place where I unwind. The marina is located at the end of the West River, in a peaceful inlet.

I was walking on the dock with a Scotch in my hand. Some boats were already at the mooring. Most were still covered. I started thinking, letting my mind go wherever it wanted.

I always go back to my work. What am I doing right? What am I doing wrong?

When I was managing $4 billion of interest rates and currency derivatives I spent a substantial amount of money to access the best minds. I did not care much about their forecasts. I wanted to understand their assumptions and their mental process.

I thought about the books Sydney Homer wrote on the history of interest rates and how they are the “fever chart” of any economy. History supports the unquestionable view that any country in serious trouble has interest rates well above or below 6%. What a sweeping generalization! This is where we are heading.

Then I thought about the reasons why I missed the forecast of bond yields. Why? I searched inside me and the answer was: I wanted to make an “elegant” forecast.

I purposely violated some basic assumptions. I believed the economy was slowing down. And it did from mid-2004 to the end of 2005. Long bonds were strong and I was correct.

But economic momentum increased since then and bonds tumbled. My assumptions were wrong.

I told myself to be more humble, less elegant, and play the odds. The low risk logic is to recognize yields rise when short-term interest rates and commodities rise. They may trade in a range, but are not a safe investment.

Lesson: George, simplify your logic, even if at the end you are saying the obvious. Be right, not elegant.

(This observation was written in April 2006).

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

7/1/10

Interesting statement

Interesting statement by Arthur Laffer ( I admire him for his down to earth logic):

"We tax people who work to pay people who do not work".

I find it interesting. What is the limit? When do we stop doing it?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.