Stocks & Equities

The first spending decline on a Black Friday weekend since 2009 reinforced projections for a lackluster holiday, increasing chances retailers will extend the deep discounts already hurting their profit margins.

Purchases at stores and websites fell 2.9 percent to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation. While 141 million people shopped, about 2 million more than last year, the average consumer’s spending dropped 3.9 percent to $407.02, the survey showed.

The survey results, if borne out at cash registers in American malls and on website checkout screens, herald retailers’ likely return to Black Friday-type discounts this week and suggest added stress for several chains. Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT) already cut profit forecasts after tepid sales gains in back-to-school shopping.

“Retailers didn’t get what they wanted from Black Friday and they will need to make it up in the next three weeks,” Poonam Goyal, an analyst for Bloomberg Industries, said in an interview. “There will be some panic sales.”

….more HERE

Following the passing of a self-imposed deadline to fix the troubled website, the administration claims it has improved site stability and increased capacity to allow 50,000 concurrent users. 

While acknowledging “more work to be done to continue to improve and enhance” the troubledhealthcare.gov website, the Obama administration said upgrades and fixes to the online marketplace have allowed for “50,000 concurrent users” and 800,000 users a day.

Since its launch October 1, the website has been dogged by errors, delays, system crashes and the general inability of millions of Americans to signup for coverage. It has also fueled calls by Republican political opponents of President Obama to repeal or delay implementation of the law, which was passed in 2010 when Democrats controlled both houses of Congress.

But Zients said Americans can now shop, choose a plan and enroll. The marketplace for the federally run web site, which is how Americans sign up for coverage in 36 states, allows consumers to choose plans sold by an array of health insurance companies, including Aetna AET +0.09% (AET), Humana HUM +0.2% (HUM), UnitedHealth Group UNH +0.16% (UNH), Cigna (CI) and most Blue Cross and Blue Shield plans. The other two dozen states are operating their own sites and have been signing up uninsured Americans at a much faster rate and without the major problems that have plagued HealthCare.gov. ”The team has knocked more than 400 bug fixes and software improvements off the punch list,” the administration said in its report.

But the road to getting the fixes was long, Zients acknowledged.

“The team identified the problems and necessary fixes and determined that healthcare.gov was fixable, but only with significant changes to the management approach and a relentless focus on execution,” the progress and performance report said.

 

Faber – We Are In A Massive Speculative Bubble

The stock market is hitting record highs every week. Does that mean we are back in bubble territory?

Unquestionably yes says Marc Faber. But not just in equities.

Faber also thinks there is a gigantic speculative bubble in bonds, farmland, bitcoins and virtually eery asset class.

He does not see any value in stocks at this point.

Marc Faber Limited managing director, and The Gloom, Boom & Doom Report publisher, discusses the market’s record run and his plans to short stocks. 

Ed Note: That said he says The Fed can Buy the whole Stock Market

“Even if the market drops by 20 percent it is not cheap. The Fed could go into the market and buy the whole S&P500. They would have to borrow money or issue money but basically they can do it. It has happened before. In Hong Kong in 1997, the government came in and bought the stock market but at that time it was cheap.”

 We have to be careful of these kind of exponentially rising markets,” chides Marc Faber, adding that he “sees no value in stocks.” Fearful of shorting, however, because “the bubble in all asset prices” can keep going due to the printing of money by world central banks, Faber explains to a blind Steve Liesman the difference between over-valuation and bubbles , warning that “future return expectations from stocks are now very low.” – in Zerohedge

Faber said the markets, which have reached record highs, could still rise before the bubble bursts, if stimulus programs such as the Federal Reserve’s massive monthly bond purchases and super-low interest rates continue. “Now can the market go up another 20 percent before it tumbles?” Faber said on “Squawk Box”. “Yeah, it can go up even more, if you print money.” 


Marc Faber
 is an international investor known for his uncanny predictions of the stock market and futures markets around the world. He has a daily blog HERE

dance full2-1Ed Note: This image is one from Faber’s GloomBoomDoom website. Here is an explanation he has for this image:

Illustrations for this web site are taken from the series of paintings created by Kaspar Meglinger between 1626 and 1635 known as “The Dance of Death”. The paintings are under the roof of Lucerne’s Spreuer Bridge (completed in 1408) and bring forcibly to mind the transitory nature of life on earth. All “The Dance of Death” illustrations can be clicked for a larger photo.

The Most Important Fundamental

equedia-logo-blue

There are a few things that every successful investor should know.

First of all, never bet against an entity that can print unlimited amounts of money.

I’ve said this many times before and explained why again in my letter, How the Government Borrows Money.  

I had a lot of success early in my career with making the right calls using my own combination of fundamental/trend/psychology analysis. But there have been a few times that no matter how strong my analyses were, I was wrong.

At the time, I couldn’t understand why.

But then I recalled what I had learned from the wisdom of some of the best traders in the world.  

I remember reading the advice of Michael Marcus, who is reputed to have turned his initial $30,000 into $80 million, and how he got his best advice from Ed Sakota – another very successful trader.

One time Ed was short silver, and the market kept going down, even while every one was bullish. Every one was talking about why silver had to go up because it was so cheap, but Ed stayed short. Michael couldn’t understand Ed’s rationale, but Ed simply said, “the trend is down, and I am going to stay short until the trend changes.”

In Jesse Livermore’s Reminiscences of a Stock Operator (recommended to me by my friend Peter in New York):

“During a bull market, most stocks will ride the primary trend up to higher prices. A rising tide lifts all boats. During a bear market, most stocks will fall in price. Even folks adept at stock picking, if they are fighting the primary trend, are not likely to achieve excellent trades. Shorting stocks in a bull market or buying stocks in a bear market, almost regardless of their individual stories, is very risky and has a high probability of failure.”

Investors should learn to never bet against a trend.  This is the most common wisdom that every major successful investor/trader shares. It is the most important aspect of investing.

The market has now soared passed 1800 – just as predicted earlier in the year.  

Yet, there’s still a lot of white noise in the media about the stock market being bubbly and frothy.

We’ve been hearing about this bubble over the last few years, but the bulls continue to march forward.  

And the bears continue to get crushed.

Has the stock market gone up too high, too fast? Maybe.

Are there fundamental and economic indicators that suggest the market should move down? Yes.

But the general trend is still up.

I have given many reasons why the market would hit 1800.

From the record of money sitting on the sidelines entering the market forcing fixed income investors to shift asset mixes toward equities (see The Monarch of Money), to the mass psychology of the retail investor (see How Leveraged is the Stock Market); it’s all playing out as expected.

The Retail Investor is Back

Last week, stock funds in the US lured in the most cash in 13 years.

Via Bloomberg:

“…Morningstar, stock funds won $172 billion in the year’s first 10 months, the largest amount since they got $272 billion in all of 2000, with domestic equity deposits the highest since 2004.

…The market run-up has left investors as a group with an unusually high allocation to equities, at 57 percent, said Francis Kinniry, a principal at Valley Forge, Pennsylvania-based Vanguard Group Inc., the world’s largest mutual-fund company.

Equity allocations were higher only twice in the past 20 years, Kinniry said: in the late 1990s leading up to the technology stock crash of 2000, and prior to the 2007-2009 global financial crisis. He based his calculations on the total amounts of money in mutual funds and exchange-traded funds across asset classes at U.S. firms.”

With the amount of cash entering the system, we have to be cautious of when the music will stop. When things turn, retail investors are usually the bagholders.  

Eventually, people take profits. For now, euphoria has a stranglehold on the market.

Ed Note: Equedia has a lot of recent reports on everything in Commodities and Resources from Diamonds to Gold HERE

Rogers on China’s Exciting Announcement

 I am excited by what happened.

imagesChina`s Exciting Announcement

Chinese had an exciting announcement in 1978 and then in 1993, they said that this announcement is as significant and as exciting as what happened previously in those two years. So far what I have seen that corrects some sectors of the Chinese economy and as you all know if you can find a government that is going to spend a lot of money or give a lot of incentives to a sector you should put your money into that sector too. So the Chinese are clear that they are going to do something about railroads, healthcare, agriculture, pollution. They have made it pretty clear they are going to do something, so I would suggest that people read what they have said and then try to find some stocks in those areas. 
 
Ed Note: The above was a posting from Jim Rogers Blog on November 30, 2013

 

Jim Rogers Discusses Currency Wars, Inflation And Gold

In the fifteen minute interview below (on November 28th) Jim Rogers discusses how he is able to make accurate predictions about the financial markets.

Rogers explains that his starting point is to start thinking in a contrarian way when everyone else is thinking the same thing.

He also thinks it is very important to be aware that the current state of affairs are always just a temporary phenomenon. Change is always just around the corner and getting ahead of that change is how to invest successfully.