10/31/11

Morning thoughts

It looks like 1275 is an important resistance level. Why? Because the S&P 500 bottomed in March and June close to 1275.

Now people are turning bearish, of course. Finding all the possible reasons to explain the decline of the market.

Wouldn't be interesting if the market were to rise to 1350 and fool most of us?

Time will tell, of course.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/30/11

I am not sure, but...

These are the kind of pictures circulating in Europe about Occupy Wall Street .... about us (click on the chart to enlarge it).

We are a nation in the midst of solving major financial problems. I am not sure if the President made the right move in instigating class warfare.

He may be right, of course. But what do I know! Income inequality is too high. But why now? Why instigate the people against each other instead of solving the issues within the realm of an orderly legislative process?

I know, I am too naive.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

Do you know ....?

... that the seasonality of bond yields is the opposite of that of stocks?

Stocks more often than not do not perform well from May to September. Bond yields, on the other hand, typically decline and bond prices rise during these months.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/29/11

It's the other way around!!!

I keep reading on all newspapers, including The Economist, that "thousands of anti-capitalist protesters took the streets in scores of cities ...”

It is the other way around! The reason the world is in trouble is because power has become concentrated in fewer hands. Everybody is at fault.

Just look at the housing sector, totally controlled by the government. The oligarchy of the banking system. The size of the government disbursing favors and money to special favored industries like energy. To power groups such as all of us (elderly, teachers, state professors, government employees). To all of us.

This is what happens when government becomes too big. The problems we are having not because capitalism is alive. Because capitalism is dead.

This is the reason the economy is not growing.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

Disturbing developments

I do not know who started it... Class warfare, I mean.

This is a sign the markets always win. There has been a huge concentration of power in the world ... from China ...to Europe...to the USA.

As I mentioned to my dear friend SNS, this is a dangerous development. Very dangerous. Because it will inspire revolutions around the globe. I was right.

It is happening here right now. But we are more civilized. We do not kill leaders. We do not shoot to their knees, as they did in Italy. We sit, silently. Camping in the streets of NY.

Leading people to hate other social classes is wrong. Very wrong. Hate is wrong.

Real leaders look at the reasons. And try to find solutions...without inciting hate and resentment. The outcome, in my humble opinion, is that we are at a dangerous crossroad.

Unfortunately the well educated will find out how to survive. They always do. The less educated will pay the price. This is how the world works.

The worst thing that can happen to us is what happened to Italy and France after WWII. People were in such dire conditions that they were willing to accept everything. Even communism. What do I have to lose? they were asking. So they voted communism. It is no coincidence the largest western communist parties were in France and Italy.

The point I am trying to make is that when the populace feels like they do not see any light at the end of the tunnel, they are ready to do crazy things. Very dangerous.

The markets are judging the capabilities of our global leaders and forcing people to react in the absolutely wrong way. Hating other people. Hopefully our leaders will understand what is happening.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/28/11

Observations

Kathi and I were having a nice dinner on the porch of a rustic restaurant on Block Island, RI overlooking a charming little harbor with a few fishing boats docked at a small marina. A young waitress in an attractive miniskirt brought us clam fritters, clam chowder and a lobster.

The evening was perfect as we were enjoying the blue color of the water, the tall green grass surrounding the harbor, and the sparkling white of the boats. Yes, the sun was gradually diving into the water.

A young lady was talking to a friend at the bar. Suddenly she got up and left. I could not fail to notice her short and tight white slacks. Very attractive indeed.

My professional mental distortion, however, took over. Where and when did it happen before? It looked like an old movie. Of course … the 1970s. Those were the days when inflation bottomed and began to rise for a decade. The economy was in a mess for many years.

Miniskirts and hot pants, as they used to call them, were in fashion. My students used to smile when I told them that fashion reflects the times. Material is saved and clothes become tighter and shorter during times of sluggish sales and poor earning growth. Now, as then.

Is the fashion industry telling us we have some rough years with higher inflation and a slow economy ahead? The message is loud and clear, even if my students keep smiling at my generalizations.

(This Observations appeared in the 9/16/02 of The Peter Dag Portfolio)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/27/11

The great European deal

Indebted nations are going to borrow more money to bail out other indebted nations who ask insolvent banks to cut a 50% off deal on the loans that were given to them. The insolvent banks will then have to raise capital which they will of course borrow from the over-indebted nations whom they just gave money to.

Crazy? Yes.

Furthermore, all pension funds will find their investments in "safe" government bonds reduced by 50%. Just wait for the people to find out that there is no money to pay their pensions.

Europe cannot work the way it is set up. I am saying this for years.

Let's enjoy the rally as long as it lasts. Every crisis is followed by a huge bull market.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

My indicators were correct

I compute several indicators measuring financial risk. They have been declining, telling me that risk was waning. They were predicting the avanlanche of liquidity coming from the global central banks.

This is usually good news for the markets. Stocks tend to rise when my financial risk indicators decline. They are more likely to head lower when financial risk rises.

What are our indicators saying now? Is it time to start thinking about selling?

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/22/11

About income differentials

From Carpe Diem.

"American households in the top income quintile have almost five times more family members working on average than the lowest quintile, and individuals in higher-income households are far more likely than lower-income households to be well-educated, married, and working full-time in their prime earning years. In contrast, individuals in low-income households are far more likely to be less-educated, working part-time, either very young or very old, and living in single-parent households."

This is very interesting research. It makes sense. The bottom line is that the "wealthiest" people are the most educated. This is the common thread.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/21/11

Another thought of the day

For traders only.

Did you ever consider to buy TBF when te market is very strong? As today? A low volatility bet.

It is a matter of odds. You make money if you play the odds.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

Tought of the day

The markets are rallying. Commodities are firm. Treasury yields are rising.

Could it be .... just could it be...that the economy is resuscitating and is improving ...not for long ... but improving?

Of course, this is good news for business because profits are going to remain at high levels.

Is this the reason the market is rising?

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/20/11

Thought of the day

The business cycle works!

Commodities, gold and copper are plunging. Why?

Slower economic growth, as all my subscribers know well, points to weak commodity and commodity sensitive stocks. It favors conservative investments such as staples, utilities and bonds.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

Watching the protests in Greece

The banks financed the easy life of some nations. Now the bonds are worthless because the people of those nations forgot they have to work hard to pay the interest of the bonds. And they wasted all the money.

The markets gave the easy life to the Greek citizens. The markets are now taking everything away. This is the reason is so sad to see the people fighting, burning, protesting because they do not understand that they cheated and have been cheated by the politicians.

This is the time of truth for the European concept, which I have always belived could not work.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/19/11

A bullish indicator

This chart (click on the chart to enlarge it) shows money banks deposit with the ECB.

A surge in these deposits suggests fear.

The interesting pattern is that all the spikes in the chart coincided with a major stock market bottom.

Let's hope so.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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

There is a lot of talk about the demise of the Euro because of the financial European problems.

I would like to remind the gurus that a currency reflects the productivity (output per man/hour) of the industries of an economic area relative to that of other economic areas.

So? The strength or weakness of the Euro depends primarily on the efficiency of the European industries. Not on its financial problems.

The dollar has been weak since 2004 because of the steadily declining competitiveness of our industries.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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 thoughts by a smart thinker

Nassim Taleb has some interesting ideas about what is going on. You may not agre with them, but they are interesting enough to pay attention to them. Just click here.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/18/11

A word of caution from a great timer

The S&P 500 will rise as high as 1,254 before falling at least 5.6 percent, he wrote in an e-mail today.

“This rally should squeeze short sellers and exhaust late buying,” said DeMark, the founder of Market Studies LLC. “The rally should be fast.” (Source: Bloomberg)


More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/17/11

Latest from Der Spiegel

The script for saving the euro has already been written. The monetary union's 17 finance ministers will meet in Brussels this Friday, their counterparts from the remaining European Union countries will join them on Saturday and, finally, on Sunday the EU heads of state and government will arrive to give their blessing to the bailout package.

The most important meetings were scheduled for the weekend so that the decisions can be taken when financial markets are closed. Everyone is afraid of how the ominous markets will react.

"We will meet on Friday until trading ends on Wall Street, and we intend to be finished on Sunday before the first markets open in Asia," says the head of the euro group, Luxembourg Prime Minister Jean-Claude Juncker.


More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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 weak data

Another bearish chart (source: The Pragmatic Capitalist). Click on the chart to enlarge it.

The Empire State is in bad shape. At recession levels. This development and weak trucking activity suggests the economy is vulnerable.

Is it time to print money again? Is this trend bad news for profits? What are implications for our investment strategy?

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

The bottom line

The euro declined and stocks reversed gains after Steffen Seibert, Merkel’s chief spokesman, said the search to end the crisis “surely extends well into next year.” His comments came after Group of 20 finance ministers and central banks endorsed parts of a plan to manage the debt crisis after weekend talks in Paris, sparking rallies in riskier assets including emerging- market currencies and stocks.

Germany was brought into the European Union to mitigate its historical power.

It was wishful thinking. Germany remains the dominant power of Europe and Europe will be shaped by Germany.

The Teutonic discipline will crush (as I have written for years) those countries that do not change. And they will not change. And they will be crushed. They are being crushed.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/15/11

Observations

Investors like formulas, or investment approaches, that can easily be formulated and have precise rules to follow. Should I buy or sell? They never ask why, when, how much, and what. In other words they do not have what I call an investment process.

An investment process is a strategic approach that helps you to answer the what, when, why, how much to buy or sell at any given point in time. The value of an investment process is its discipline.

Most investors lose money because they do not have an investment process.

When you look for an investment advisor I agree that performance is important. Understanding the investment process of the advisor, however, is crucial. Recognizing the flexibility and adaptability of an investment process is also relevant because the investment environment has a knack for continuous change. It allows to manage risk.

My investment process is based on two main pillars. The first one is geared to understanding what is happening to the economy and how it will affect the price of various asset classes.

The second one is that I follow the markets and try to understand if they agree with my conclusions. But I am not pragmatic. If they rise, I will try to follow prices on their way up. If they decline, I will start selling.

The first pillar gives the discipline. The second one provides the dimension of flexibility.

(This Observations appeared in the 8/26/2002 issue of The Peter Dag Portfolio).

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/14/11

Technical patterns

Today the market is hitting the 1200-1220 range. This is a major resistance levels.

Its penetration on the upside may signal very good news for stocks.

Let's wait and see.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/13/11

Business cycles and investment in commodity-sensitive stocks

The CRB bottomed at around 270 in late 2009 and the early part of 2010 as the economy started to strengthen.

The CRB rallied strongly as the economy strengthened. The CRB peaked close to 370 in April-May of 2011.

The CRB began sliding in 2011 as the economy weakened. As of this writing it stands at close to 305, about 16% below the April-May peak.

Commodities follow closely the trend of the business cycle. They strengthen when the economy improves. They decline when the business cycle weakens (click on the chart to enlarge it).

In my The Peter Dag Portfolio (and in my free videos on www.peterdag.com) I show that commodity sensitive stocks follow closely the pattern of the CRB.

Caterpillar (CAT), for instance, has followed the pattern of the CRB very closely since late 2009.

The point is that investors should try to recognize first the trend of the business cycle and then develop a strategy consistent with historical patterns. It may not be a good strategy to buy commodity sensitive stocks when the economy weakens and commodities decline.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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

For Democrats, Schumer is championing a national infrastructure bank that could help build roads, fix bridges and create jobs. For Republicans, he is open to letting U.S. corporations bring home vast amounts of overseas income without having to pay the full 35 percent corporate-tax rate. (source: Bloomberg)

Congress authorizes $1 billion for continuing federal disaster relief.

One proposed list of demands for the Occupy Wall Street movement includes "free college tuition" and "immediate across the board forgiveness" of student debt.

The government is getting more and more involved with our lives. It is even protecting special groups of people from disasters. Why? Why should I pay for their decision of building in a disaster-prone area.

And we keep demanding more and more from the government.

The time will come when the markets will convince us that we need to work harder for a living and rely less and less on Big Daddy.

A big governemnt and concentration of power are the main reasons for the economy to grow so slowly.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/11/11

Everybody talks about the death of capitalism.

You must be kidding.

Europe and the USA are skidding into no growth (as the USSR) because they have implemented so many social programs sponsored by K Marx.

I agree they are all needed, They are great. Gosh, we should have more of them. We should not be able to work and have the government pay us!

The problem is that we cannot afford them, and we cannot afford a huge government administering all these appealing ideas.

Slow growth is typically associated with large concentration of power and large governments.

What we are witnessing is not the death of capitalism. We are witnessing the death of socialim.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/10/11

The full moon indicator (follow up)

This month also seems to be working.

I know, it is crazy!

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/9/11

The full moon indicator

Is the market ready for a pop?

On October 11th we will have a full moon. Is it going to be good news for the market? Let's hope so.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/8/11

Food for thought

He took resources from no one. He coerced no one. He pandered to no one. He made hundreds of millions of people happy. He ended up being responsible for the creation of tens if not hundreds of thousands of jobs, and inspired countless others to mimic him, or to beat him, or to otherwise complement his work. He asked for no special favors. He was adopted, and certainly was not dealt the best hand in the lottery of life. He blamed no one else for his failures. He shared in his successes. I would argue that this one man’s short life was far more important than a century’s worth of politicians who claim to be working in your interest. (Source: The Unbroken Window)

Thought of the day

Commodities keep plunging (click on the chart to enlarge it).

If you have reviewed my free videos on www.peterdag.com on how commodities and all other asset classes are impacted by the business cycle, you would realize that the message is bad news.

In spite of relatively good news about employment and the ISM services, commodities are saying that the economy remains in bad shape.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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

I am reading a book on metaphysics by Martin Heidegger, the German philosopher. Metaphysics tries to shed light on the relationship between “being” and “non-being”. Since Plato and Aristotle the human race has been struggling to identify what “non-being” is. It has to exist. What is it?

Eventually humankind resolved the issue by identifying “non-being” with many gods or just one. It seems that the Judeo-Christian-Islamic tradition is an evolution of Greek mythology when gods and humans mingled together and the gods told humans what to do and how to behave. Of course, the relationship with the gods was a human interpretation of what the gods said this relationship should be. This is a difficult proposition to accept. The problem with these interpretations is that there are many and often conflicting ones.

Oriental philosophies, dating back to 3000-5000 BC, on the other hand, resolved the issue by recognizing that the challenge for humanity is a matter of behavior. They provided guidelines and philosophical concepts to identify the behavior that would give individuals internal peace. Only then would they understand the meaning of “being” and “non-being”. Only then will the two concepts merge into one.

(This Observations appeared in the 7/29/02 of The Peter Dag Portfolio)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/6/11

It is a big mess driven by the banking system and corrupted governments

After they joined the euro zone, the countries of southern Europe suddenly discovered they could borrow money at German-style rates, and any hope of sorting out their dodgy finances vanished. But it was France and Germany who set the worst example, when they broke the euro-zone rules they had forced on others.

Furthermore, the European authorities ran several "stress tests". And the banks reported - every time - that they were OK. Of course, the banks tell the European Governments what to do and what to say.

And now they are all swimming in the same polluted water.

What is the impact on the markets? We have a disciplined approach based on time-tested economic and financial indicators.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

If true, we are facing scary times

In an interview with IMF advisor Robert Shapiro, the bailout expert has pretty much said what, once again, is on everyone's mind: "If they can not address [the financial crisis] in a credible way I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system. We are not just talking about a relatively small Belgian bank, we are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France, that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected. All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world. This would be a crisis that would be in my view more serrious than the crisis in 2008.... What we don't know the state of credit default swaps held by banks against sovereign debt and against European banks, nor do we know the state of CDS held by British banks, nor are we certain of how certain the exposure of British banks is to the Ireland sovereign debt problems." (Source: ZeroHedge)


More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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 note

JNK has ouperformed the market on a total return basis over the the past 3 months, since the beginning of the year, and in the past 3 and 5 years.

JNK has reached very oversold levels. Is it time to add to it?

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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 are disappointed. Most people have lost their enthusiasm. Why? Because the economy has lost its vitality.

There is only one main reason: economic growth stalls because governments have reached an enormous size. Their tentacles have reached every aspect of our life. And we paralyze because we do not see why we should fight it. It is a losing battle. And we wait for something to happen.

I have seen many countries stagnating for these same reasons.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/5/11

Indicators

To those of you who are familiar with my indicators and their meaning.

I have just updated my proprietary financial risk indcators ..... and they keep moving higher.

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

The death of a genius


We have been fortunate to have lived when he did and be able to recognize how he changed our life.

May he rest in peace.

10/3/11

Stocks and commodities

The market keeps sinking, a good leading indicator of the economy.

It points to slower growth in business. And reflecting weaker earnings.

Slower economic growth forces commodities (click on the chart to enlarge it) to decline (crude oil, lumber, .....).

More details in my The Peter Dag Portfolio and my free educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

Market alert

I was watching closely the 1120 level for the S&P 500.

Right now the S&P 500 is standing at 1115.

More details in my The Peter Dag Portfolio and my educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/2/11

Games theory and investing

Games theory was finalized in the 1940s and its immediate application was in fighting the war. It helps strategists determine what to do to minimize risk and maximize the payoff. This is particularly useful when you do not know what the enemy is going to do, but you can guess its various alternatives.

If you substitute the word enemy with markets the theory becomes applicable to developing investment strategies. Especially now.

When I give you my outlook and strategy I take them from an array of possible scenarios and possible strategies. What I discuss in each letter is the most likely one.

Early in 2001 I predicted a strong rebound by the end of 2001 or early part of 2002. The odds were quite high due to the huge injection of liquidity by the Fed. The strategy I recommended was to invest in value and commodity driven stocks. I also suggested avoiding bonds.

As I mentioned a few times, however, I feel that this ninth financial cycle (since 1960) is going to be different, with lead-lags between monetary aggregates and business activity much shorter than the usual 12-18 months.
I am beginning to consider a low probability scenario that could eventually influence our investment strategy. This scenario is based on the fact that the economy, after an initial strong rebound (which we are experiencing), is going to slow down again very soon. Possibly toward the end of the year.

Growth in monetary aggregates peaked last December and has been declining for four months. This development is beginning to have some significance and I need to start taking it into account. The slow rebound in retail sales and car sales, down tick in consumer confidence and in the ISM non-manufacturing index are minor developments, but they could be the beginning of a new trend. What are the odds? 10%. They are not significant enough to make changes in strategy, but should be followed closely.

An important lesson I learned is that economic and financial adjustments happen very slowly. The important step is to take notice of the change and follow it closely. In a game of strategy one must keep track of various playable options and gradually shift to more profitable strategies as the game slowly evolves.

The financial markets are fast approaching the important summer months. This is an important seasonal period when stocks are likely to do poorly and bonds act well. During these months commodities also tend to move in a narrow range. The seasonality of these markets is too reliable to be ignored. I believe it is wise to adapt to it.

What to do?

• I am becoming neutral-to-bullish on bonds, but just for the summer months. They will become a good alternative to cash.
• The age of high PE and no dividend stocks has been over for more than a year. I am expecting this trend to continue.
• Emphasize low PE and dividend paying companies. Ideally yields should be greater than 2-3%.
• Commodity driven stocks remain attractive because of the exaggerated-market-distorting easing policy of the Fed. They may stabilize in the summer months.
• Reducing unprofitable positions and re-investing in the strongest ones is always a valid strategy.

(This note appeared in the 4/22/02 issue of The Peter dag Portfolio)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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

Time. A few years ago, the same friend who introduced me to Qigong lent me a tape of a well-known Indian guru. A considerable part of the content was devoted to discussing the concept of time and how we can control it (within realistic bounds, of course).

One of the many examples he made was that time is shorter than average for nervous, impulsive people with a hectic life. They tend to have health problems that limit their life span. People who live a more serene and relaxed life, on the other hand, tend to live longer. They stretch their time allowance.

In a state of meditation time seems to stop. The heart beats more slowly. As we resume our daily chores, events around us seem to have a different rhythm. We seem to have regained strength and feel more relaxed. Time has extended.

The way we perceive time depends also on our age. This leads to misjudging the behavior of older or younger people – depending on which side of the fence you are. Recently I visited my friend Jack. He is 95 now. We went out for lunch. His appetite was excellent, but he gave me the sense he moved in a different time dimension, and he was trying to make me understand the idea.

I told him about my business, successes, and challenges. He kept smiling. He tried to answer, only briefly. He is in a different world, in a different time dimension wallpapered by many experiences and beautiful memories. His pace is slower because his time ticks more slowly. But it is slower for me. Not for him. It shows that the concept of time depends on age.

My grandchildren were playing at my feet. I was watching them, smiling. And I remembered the smile of my friend. Their time dimension is exhausting, so much different from mine.

As we age we tend to feel sorry for “older” people. Perhaps we do not understand they are living in a different time warp. As we age, our concept of time changes and nature makes us adapt to it. The clock seems to be moving slower, slower, and slower. Until it stops.

(This Observations appeared in the 4/8/02 issue of The Peter Dag Portfolio)

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

10/1/11

The full moon indicator

The next full moon is October 12. It is not unusual -- actually quite likely -- that the market enjoys a rally around the date of a full moon.

I know. It is incredible, funny, and crazy. But let's see what happens.

If this theory is correct the market should slide until mid Octber and then start rallying.

Let's see what happens.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

Business cycle and stocks

Freeport McMoran Copper and Gold [FCX 30.45 -0.89 (-2.84%) ] has certainly felt the impact of an uncertain housing market. Copper is a key component for used for wiring and new plumbing in new construction. This has affected the copper producers, including Freeport McMoran Copper and Gold. (Source: CNBC)

The business cycle drives the relative strength of market sectors.

I am showing the details in a video presentation. It is absolutely free. Just go to my website www.peterdag.com. You will find out why stocks like FCX and CAT have been much weaker than the market.

More details in my The Peter Dag Portfolio and my educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.

The markets always win

To fix their persistent pension problems, some U.S. states are looking to reshape their retirement plans to resemble those in the private sector, but they may find may employees resistant and the savings elusive. (Source: CNBC)


The markets always win. They have their unique way of discovering excesses and force us to correct them.

The markets are forcing public pension funds to recognize that returns from investments do not reflect the nonsensical actuarial assumptions embedded in the promises made to public retirees.

More details in my The Peter Dag Portfolio and my educational videos on www.peterdag.com.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year 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.