Stocks & Equities

Minefields that can Blow-up Global Stock Markets in 2012

Nowadays, it seems as though the market is always teetering on the knife’s edge. Depending upon which way the wind is blowing on any given day, or what chatter is coming across the newswires, markets around the globe are moving at lightning fast speed. Sentiment can change instantly, with the release of unexpected economic data, market movements, or surprising actions of central bankers. The effect of high frequency trading (HFT) has turned the decades old profession of investing into a high stakes gambling operation, and more characteristic of commodity trading. Such erratic behavior on a daily basis makes it difficult, if not impossible, for analysts to formulate a long-term view, and for investors to maintain a long-term, “Buy and hold” position. “As soon as you think you’ve got the key to the stock market, they change the lock,” said long-time market guru, Joe Granville.



S&P 500: Range Contraction Indicator Suggests A Deeper Correction

On Tuesday the RCI (Range Contraction Indicator) closed at 1.125% for the cash S&P 500.

As mentioned in Monday’s article, when the RCI closes back above 1.1% (after first closing below 0.9%), it suggests continuing daily range expansion – which usually, but not always – is associated with strong bearish moves.

Again this is an indicator, not necessarily an entry signal. But if asked where should a stop be placed if one were to use it as an end-of-day short entry, my answer would be either just above the high of the day in which the signal was generated (today’s high of 1383.01); or for a more lenient stop, above the recent high (above the 1422.38 high).


As far as downside objectives, the 1286 to 1293 area figures prominently. From Tuesday’s close of 1358.59 down to 1293 (the first significant support point), this would be just under a 5% decline – still a very reasonable correction given the near exponential rally from the mid-December lows.

The October 2011 high was 1292.66, and a confluence of retracement levels arrive from 1286.41 to 1290.52:

1290.52 = 50% retracement of the Nov11 low to the recent high.

1289.59 = 38.2% retracement of the Oct11 low to the recent high.

1286.41 = 61.8% retracement of the Dec11 low to the recent high.

The only Fibonacci retracement level that I feel has more significance than a flip of a coin is the 50% level. But when a number of retracement levels as well as other technical points cluster around a particular area, then that reoccurrence and reinforcement becomes noteworthy.

The S&P correction can certainly segue into a uniformly bearish trend and trade lower than 1286, but for now this level is one of the most significant near-term objectives/support level.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

A Must Read Long Term View


“During the same three decades, the US altered its fiscal policy, first under Ronald Reagan and almost continuously since. (The Clinton administration was the exception.) Rising deficit financing has been facilitated by falling nominal interest rates. That combination leads to level, or even falling, aggregate debt service. You can owe more and more and have smaller and smaller monthly payments. That is the magic of falling interest rates. Until they hit the zero boundary.”

A note to readers. This 2000-word commentary is a longer-term view; think in terms of years, not months or days. The essay is not in conflict with the fully invested position currently held at Cumberland. The words reflect my personal thinking only. Some of my colleagues disagree. In my personal view, the future is uncertain (of course) and may be unattractive for the longer-term outlook. In my view, our American political system is failing us. In my view, we are joining the list of declining world powers. The framework to support that argument follows.

“The external menace ‘You’ll end up like Greece, if you do not do this and that’ and the internal opprobrium heaped on some categories of taxpayers are very powerful and dangerous instruments to deprive people of their own personal freedoms.” –Vincenzo Sciarretta

My friend Vincenzo is a journalist from Italy. He is a serious writer and researcher. He has covered the financial markets and economy of Italy for years. He and I co-authored a book on Europe during the optimistic period. If he and I were to write such a book now, it would probably be quite pessimistic.

Vince responded to my recent email series about the downward spiral underway in the euro zone. Readers may find those essays at Vince noted my reports from the meetings in Paris and my reference to the upcoming French elections, where the promise of the Socialist candidate is to raise the tax rate on the highest income level to 75%. I will end this commentary with a longer email from Vince, in which he quotes historian Will Durant and discusses the fall of the Roman Empire.

Now to write some thoughts that gnaw at me in the late of the night, when sleep is elusive.

Simply put: I’m worried.


When I get worried, I read and re-read in my library. I can honestly say that I have had my nose in a thousand of those books. The library holds many texts by giants. They wrote about history, economics, and finance. They took the strategic view. George Akerlof, Jared Diamond, Niall Ferguson, Carmen Reinhart & Ken Rogoff, Robert Shiller, and Nassim Taleb are among the modern writers. Milton Friedman, Martin Gilbert, Friedrich Hayek and his polar opposite John Maynard Keynes, Ludwig von Mises, R.R. Palmer, and Adam Smith are among the classics.

A favorite of mine is Paul Kennedy. Twenty-five years ago, this Yale historian concluded his monumental work The Rise and Fall of Great Powers with a profound observation:

“In the largest sense of all, therefore, the only answer to the question increasingly debated by the public of whether the United States can preserve its existing position is ‘no – for it simply has not been given to any one society to remain permanently ahead of all the others, because that would imply a freezing of the differential pattern of growth rates, technological advance, and military developments which has existed since time immemorial.”

Kennedy then argued that the United States has the ability to moderate or accelerate the pace of decline. Such is also the case for other great powers, many of which are in a state of decline from their centuries-old power peak. Among others in his treatise, Kennedy’s history lessons examine Spain, France, Rome, and the Austro-Hungarian Empire.

I think I just covered a lot of the euro-zone geography.

In 1987, Kennedy warned us, “The task facing American statesmen over the decades, therefore, is to recognize that broad trends are under way, and that there is a need to ‘manage’ affairs so that the relative erosion of the United States’ position takes place slowly and smoothly.” He added the additional warning that it not be “accelerated by policies which bring merely short-term advantage but longer-term disadvantage.”

Unfortunately, America’s leadership has not heeded such warnings.

For decades futurists have complained about the rising use of government debt financing by the United States. They predicted calamitous outcomes, which did not arrive as expected. Paul Volcker and Alan Greenspan applied monetary policy in ways that allowed inflation and, hence, interest rates to spend a quarter century in decline. The Volcker-Greenspan era opened with the highest interest rates since the Civil War. Building on this downward momentum, Ben Bernanke has taken the target short-term interest rate to near zero and held it there.

During the same three decades, the US altered its fiscal policy, first under Ronald Reagan and almost continuously since. (The Clinton administration was the exception.) Rising deficit financing has been facilitated by falling nominal interest rates. That combination leads to level, or even falling, aggregate debt service. You can owe more and more and have smaller and smaller monthly payments. That is the magic of falling interest rates. Until they hit the zero boundary.

What happens when the music stops and the chairs are full? Are we reaching that point in the United States? It appears we have done so in Europe, certainly in Greece, the eldest of the declining great powers. We are also getting there in Japan and the UK. All four confront similar financial straits: zero-bound interest rates coupled with expanding national government debt.

About 85% of the capital markets of the world trade by means of the dollar, yen, pound, and euro. The G-4 central banks have collectively expanded their holdings of government securities and loans from $3.5 trillion to $9 trillion in just four years. At the prevailing very low interest rates, the functioning of monetary policy and the role of fiscal policy merge. Is there any difference between a million-dollar suitcase of one hundred dollar bills and a million-dollar, zero-interest treasury bill? You need an armed guard to protect the first one. With the second one, you need to clear an electronic trade in a safe financial institution, not an unsupervised (no more Fed surveillance) Federal Reserve primary dealer like MF Global. Your earnings on either the cash or the T-bill are the same: you earn zero. You can use the treasury bill to secure a repo transaction at a near-zero interest rate. You can use the cash to conduct many types of black-market or gray-market trades. Is it any wonder that the hundred-dollar bill is so popular? Isn’t it understandable that roughly two-thirds of US currency circulates outside the United States?

Is this a healthy situation? How long can it persist? What happens next? When interest rates eventually rise, what will be the result of this blend of monetary/fiscal policy as its unwinding turns malignant?

Moreover, who then will be the politicians that inherit this mess? Who will occupy the central banker’s chair?

I worry because there is no rationally explained strategic-exit plan in the G4. Not in the US. Not in Japan. Not in the euro zone. Not in the United Kingdom.

I also worry because the direction of taxation is up, if certain politicians continue to have their way. I worry because US business tax rates are now the highest in the entire world. In addition, I worry because of the increasing power that national governments wield in the mature economies of the world.

Applied power eventually leads to serfdom.

Increasing taxation is a characteristic of a declining great power.

Governments are failing to heed Paul Kennedy’s warnings. They are worsening the longer-term outlook. The Western world’s leaders ignored Kennedy when he wrote “… accelerated by policies which bring merely short-term advantage but longer-term disadvantage.”

Zero-bound interest rates are a short-term advantage. We enjoy them. We profit from them. We expect them to continue for a while. They are like the oxygen administered to a very ill patient. If the patient dies, the oxygen has eased the pain in the terminal phase. If the patient lives, the lungs have been scarred and need many years of healing and repair. Today, the patient is receiving oxygen in the G4. Death is being delayed (Greece) or, perhaps, thwarted (elsewhere in the euro zone, Japan, US, and UK).

We do not know how this will play out. History only warns us that many of the likely outcomes may be unpleasant. The authors I cited have articulated their differing and diverse views. Their conclusions have tended to be in the form of warnings.

Paul Kennedy favors candor. In his second, exquisite work, Preparing for the Twenty-First Century, he wrote: “Many earlier attempts to peer into the future concluded either in a tone of unrestrained optimism, or in gloomy forebodings, or (as in Toynbee’s case) in appeals for spiritual revival. Perhaps this work should also finish on such a note. Yet the fact remains that simply because we do not know the future, it is impossible to say with certainty whether global trends will lead to terrible disasters or be diverted by astonishing advances in human adaption.”

Of course, we hope for the latter and worry about the former. History gives us little comfort.

For the time being we shall remain on the sanguine side with regard to this global experiment with increasing debt, zero-bound interest rates, and a monetary/fiscal policy compromise that obfuscates the difference between them.

As long as this persists, it means financial markets do well, stocks rise, risk assets regain favor, bonds with hedges yield results, and cash continues to earn zero return.

That is now. It may change tomorrow, next week, next month, next year or not for quite some time. There is no way to know.

For the downside from history we return to Vincenzo’s email to me:

“Dear David,

“I invite you to read the last few sentences of the below article from The Lessons of History, by Will and Ariel Durant. It is about how the destruction of the Roman Empire through the taxation channel made people ‘slaves,’ in other words how serfdom emerged. This is my number one fear for Italy, but I guess France is making the same mistakes, just starting from a lower debt level. You can also find an online version of the book, thanks to Google.

“Rome had its socialist interlude under Diocletian. Faced with increasing poverty and restlessness among the masses, and with the imminent danger of barbarian invasion, he issued in A.D. 3 an edictum de pretiis, which denounced monopolists for keeping goods from the market to raise prices, and set maximum prices and wages for all important articles and services. Extensive public works were undertaken to put the unemployed to work, and food was distributed gratis, or at reduced prices, to the poor. The government – which already owned most mines, quarries, and salt deposits – brought nearly all major industries and guilds under detailed control. ‘In every large town,’ we are told, ‘the state became a powerful employer, standing head and shoulders above the private industrialists, who were in any case crushed by taxation.’ When businessmen predicted ruin, Diocletian explained that the barbarians were at the gate, and that individual liberty had to be shelved until collective liberty could be made secure. The socialism of Diocletian was a war economy, made possible by fear of foreign attack. Other factors equal, internal liberty varies inversely with external danger.

“The task of controlling men in economic detail proved too much for Diocletian’s expanding, expensive, and corrupt bureaucracy. To support this officialdom – the army, the courts, public works, and the dole – taxation rose to such heights that people lost the incentive to work or earn, and an erosive contest began between lawyers finding devices to evade taxes and lawyers formulating laws to prevent evasion. Thousands of Romans, to escape the tax gatherer, fled over the frontiers to seek refuge among the barbarians. Seeking to check this elusive mobility and to facilitate regulation and taxation, the government issued decrees binding the peasant to his field and the worker to his shop until all their debts and taxes had been paid. In this and other ways medieval serfdom began.”

Thank you, Vincenzo, for this serious response. Thank you Paul Kennedy for superbly articulating history and issuing clear warnings. Thank you, dear reader, if you are still with me. I hope I have provoked some thought.

Now we will seek another night’s sleep and hope it is not elusive.

David R. Kotok, Chairman and Chief Investment Officer

Stocks Have Reached the Euphoria Stage

Two stocks, AAPL and PCLN, have been the leaders of this bull market. Both have entered the euphoric “bubble” stage. When the Apple and Priceline parabolas break it will almost certainly signal the end of this bull market.

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The last bull ended when the leading stock, GOOG, entered a parabolic “bubble” phase. That was the signal that the bull had reached the euphoria stage. When the GOOG bubble popped it signaled the end of the bull market.

24997 a

Apple is now stretched 49% above the 200 day moving average. Anything between 50 and 60% above the mean is extreme dangerous territory.

As I pointed out in my last article the dollar is beginning its second daily cycle up in what could very well be a cyclical bull market. This should correspond with the stock market topping and the next leg down in the secular bear market.

My best guess is that we will see a sharp selloff over the next 2 to 3 weeks, followed by a sharp rebound (QE3) that may, or may not, move stocks to marginal new highs, similar to the 2007 top.

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The poor employment report on Friday is the first warning shot across the bow that the economy is slowing in preparation for moving down into the next recession/depression.

Bernanke is in the same position he was in 2007. Printing more money won’t stop the collapse. It will only continue to spike the price of energy and exacerbate the decline.

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About Safehaven

At some point in your life you will want to, or be forced to consider an investment program. The main criteria in choosing one that is right for you is summed up in three words “Preservation of Capital”. Sounds pretty simple doesn’t it? Remember, “Investing is not Saving”! The mainstream media would lead us to believe otherwise and seldom comment on the risks inherent in equity ownership or debt investments. They are quick to point out the positive aspects of every news event with prepared soundbites of information. They provide simple, continual commentary on the respective markets to show they are up to date with the latest developments. They don’t comment on developing trends until the trend is obvious to everyone; acting as cheerleaders for the greatest bull market of the twentieth century. A cautious and more reasoned approach is needed.

We are not permabears, nor are we bullish for the foreseeable future. The Stock Market Bubble is not our greatest concern. The Credit Bubble, however, when it inevitably implodes, will wreak havoc on all sectors of the World Economy, including the Stock Market.

The articles from GoldenBar and PrudentBear are all a must read. As a starter, we suggest you read On the Manipulation of Money and Credit by Doug Noland of Prudent Bear and Inflation versus Deflationby Ed Bugos of GoldenBar. These articles help towards an understanding of the Bubble and monetary inflation. GoldenBar articles are published bi-weekly, and PrudentBear is published Wednesday and Friday evenings. Please visit their web sites.

If you have an interest in long-term cycles, then start with Generations and Business Cycles by Michael A. Alexander and Measuring Financial Time: The Magic of Pi by Barclay T. Leib.

Also strongly recommended is David Jensen’s In Denial of Crisis and Antal Fekete’s two series,Revisionist View of the Great Depression and The Goldbug Variations I.

We won’t update every hour of every day- it is not necessary. Bull and bear markets evolve over many months and years, and a single news event has never changed the long-term direction of markets. If you have written an article, if you wish to provide a link to a newsworthy item, or if you have comments, suggestions, or recommendations, please Contact Us.

The site has been kept simple to allow quick download times and to keep problems with old browsers to a minimum. If you are having a problem, please email us and we will try to adjust for your browser or printer.

Enjoy your visit and visit often!

The Buying Opportunity of a Lifetime is Coming…

A few months ago, I started warning that …

  • We’d see a short-term rally in the dollar, mainly against the euro.
  • Europe would kick the sovereign debt can down the road a bit with money-printing (thereby weakening its currency).
  • The U.S. economy would start to look a bit better.
  • China would largely engineer a soft landing, and the yuan would appreciate.
  • Commodities would enter a short-term period of disinflation.
  • Let’s see how things have panned out so far.
  •  Since the first of the year, the U.S. dollar, judging by the U.S. Dollar Index that’s traded on the New York Board of Trade, is essentially flat. In the last few days, however, it’s started a renewed uptrend — and the euro has started to sink.

Given the dollar’s rally last week, I think the trend will continue, as Europe’s economy — due to the extreme austerity measures being taken — sinks into a depression and the euro suffers from it.

The European Central Bank (ECB), meanwhile, has indeed printed a lot of money — over $1 trillion. This is doing nothing but keeping the banks alive, kicking the debt crisis down the road, and threatening to further pressure the euro lower.

  • At the same time, we’ve seen noticeable improvements in the U.S. economy — mainly in employment. Don’t get too used to it, though. I don’t think the U.S. economy is going to do much better in the short run. It’s only looking better because Europe is in such bad shape.
  • China’s economy also has indeed softened, even a bit more than I expected. Nevertheless, all the stats I study tell me China has indeed engineered a soft landing — with GDP running at 8.4% for this year’s first quarter … industrial production is already starting to rebound … retail sales are still pretty vibrant at 14.7% annualized growth … and property prices are starting to stabilize.

As I told you in a recent column, there will be no implosions in China, no disasters. Mind you, Beijing has engineered this soft landing with plenty of ammo left. Which means they have plenty of options available to boost growth, should they need to.

Meanwhile …

  •  Commodities have indeed entered a disinflationary period. One that won’t last long, but one that could be very sharp indeed.

Already …

•  Coffee prices have fallen 23.8% from their high earlier this year.

•  Cocoa prices are down 16.4%.

•  Cotton prices are down 10.25%.

•  Wheat’s down 7.4%.

•  Corn’s down more than 15% from its high last June.

•  Platinum’s down 8.6% since early March.

•  Crude oil’s fallen more than 8% since early March (and 13.3% since last May).

•  Cattle prices are down more than 10%, just since February.

•  Natural gas prices have plunged almost 36% since the first of the year.

I say this not to boast, but to prove to you one major point: There can be big disinflationary waves in commodities, even when there’s money-printing going on.

Why’s that important? Because nine out of 10 investors (and analysts) think all too linearly about the markets.

They think that, if there’s money-printing going on, in any part of the developed world, it’s inflationary. And that commodity prices must therefore go up.

Not true. The markets are dynamic, complex systems. If you’re to get the big picture right, you simply have to throw out all the old rules you’ve been taught or told — and stop thinking about the markets linearly.

Instead, you have to realize that markets can do anything at any time. They can defy linear logic … they can defy the fundamentals … they can defy the news. They can also defy the authorities. The biggest traders and investors in the world. And more.

Just consider gold. It’s down more than $300, or 15.6%, since its record high of last year … and upward of $151, or 8.4%, since its high at the end of February. This, despite massive European money-printing … continual bad news out of Europe … alleged buying of gold by Beijing … and an improvement in the U.S. economy, which should be a tad inflationary for gold.

Silver’s down even more — a whopping 38.1% since its record high last year and 16.4% since its high just six weeks ago.

The markets also take no prisoners. John Paulson’s main hedge fund was down a whopping 51% in 2011 … and a reported 13% so far this year. Yet he’s one of the biggest and savviest money managers in the world.

The thing is, the disinflation you’re seeing in commodity prices is bound to continue. Through September of this year, according to my models. By then, we will likely see the majority of investors throw in the towel on the commodity sector — which will then make it an optimal time to go back in and back up the truck and buy.

What about the U.S. stock markets? A reader recently wrote in questioning me on my long-term forecast, wondering how in the heck the Dow Industrials could ever run to substantial record new highs (my forecast) if the U.S. economy is never going to fully recover and instead, slip to No. 2 in the world, with China rising to No. 1.

Defies logic, right? On the surface, yes. But it’s happened before. Just go back to the 1932 to 1937 period. The U.S. economy sank deeper and deeper into depression, yet the Dow Industrials soared 287%.

Why? Because even though the U.S. economy was sinking, Europe’s economy was sinking even more. Capital fled the European stock and bond markets in droves, pushing the Dow substantially higher.

The same thing will happen again. Only this time, it will push both U.S. and Chinese stock markets substantially higher. Gold will soar to more than $5,000 an ounce as well.

But we’re not there just yet. More pullbacks are coming in the commodity sector, and in stocks.

When those pullbacks are finished, it will, in my opinion, represent the buying opportunity of a lifetime, in commodities and stocks.

What about the recent talk of the Fed abandoning a third round of quantitative easing and not printing any more money? That’s temporary.

As sure as I know my name, the Fed will come back in and print record amounts of money. We’re not there yet either, though. Expect it later this year, when commodities and stocks look terrible.

Stay tuned …

Best wishes,


P.S. The sad state of affairs in the euro zone may be helping the dollar now. But as the Chinese yuan makes big strides, it’s trampling the greenback in the process.

Even worse, the U.S. government is not only letting it happen, but it’s playing a big role in helping to devalue our currency! This gives Washington a chance to inflate away the burden of its unpayable debt mountain.

Don’t let your wealth be left in the dust — watch my free video for proof of this conspiracy, and learn the steps you need to take to protect yourself and even prosper. Just click here to watch it now.

Larry Edelson has nearly 33 years of investing experience with a focus in the precious metals and natural resources markets. His Real Wealth Report (a monthly publication) and Resource Windfall Trader (weekly) provide a continuing education on natural resource investments, with recommendations aiming for both profit and risk management.

For more information on Real Wealth Reportclick here.
For more information on Resource Windfall Traderclick here.

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Successful Investing Strategies in a Government-Centric Market

You’ve heard of “risk on”; you’ve heard of “risk off”… But have you heard of “everything off”?

That’s the trade that seems to be underway right now. Investors are dumping everything with a ticker symbol: US stocks, foreign stocks, government bonds, corporate bonds, precious metals, crude oil and almost every other commodity.

In Wednesday’s trading worldwide, not one single major stock market index moved to the upside. In fact, here in the Americas — North, South and Central — no stock market index of any kind moved to the upside. Over in Europe, the ticker tapes were equally dismal, unless you happened to be tracking the bullish action in Slovenia, Montenegro, Cyprus or Latvia.

In the commodity markets, the CRB Index of commodities stumbled 1.5% this morning, as 14 of the 19 commodities in the index slipped into the red. Only nickel and coffee managed to gain more than one percent.

The newswires blamed the worldwide downticks both on the Federal Reserve and a poor government bond auction in Spain. The Fed was to blame, said Bloomberg News, “as the Fed minutes [from the March 13 FOMC meeting] showed less urgency to add stimulus.”

Meanwhile, the Spanish government struggled to sell bonds in its first auction since the country said its public debt would surge to record this year. The Spaniards, who had been hoping to sell €3.5 billion worth of government bonds, managed to knock down the gavel on only €2.6 billion worth of bonds.

The poor auction results kicked off a steep selloff in the Spanish bond market — pushing the yield on the 10-year government bond to its highest level since January, which was immediately before the ECB “solved” the eurozone crisis.

In other words, Dear Reader, the capricious gales of bureaucratic meddling and governmental manipulations continue to buffet the financial markets. Setting a reliable course in these conditions is no easy task.

Over the long run, of course, underlying fundamentals like earnings growth and dividend yields will dictate the course of one’s investments. But over the short run, the treacherous seas of interventionist governments and too-big-to-fail crony capitalism can capsize even the most seaworthy of investment strategies.

Sure, exceptional companies will still be exceptional. But when governments are actively price-fixing the cost of credit, while selectively rescuing fatally flawed governments and enterprises, rot flourishes. And when rot flourishes, healthy organisms struggle to take root and grow.

Furthermore, no one wants to build any kind of structure on a rotting foundation. So if investors, en masse, believe that the foundations underlying their investments are corrupt and rotten, they will seek to build their wealth elsewhere — either in other jurisdictions or simply in other asset classes.

They will seek to build their wealth as far away from rotten interventionist policies as possible. That could mean anything from seeking out the safest currencies to tracking down the most compelling foreign stocks or bonds to accumulating the kinds of assets that governments cannot easily corrupt — like real estate, precious metals and other hard assets.

This little introduction brings us to the latest (and most exciting) installment of what we call the Daily Reckoning Group Research Project. We will ask you, Dear Readers, to devise a “permanent portfolio.” Here’s the context:

A few decades ago, a guy named Harry Browne devised an investment strategy he dubbed the “Permanent Portfolio.” The idea was so simple it seemed almost moronic. And yet, with the passage of time we have discovered that his idea was pure genius.

He suggested building an investment portfolio out of only four components: gold, bonds, stocks and cash.


The idea was that at any given time, two or three of these four components might underperform — but the other portfolio components would perform so strongly, you’d get an overall gain that would outpace any increase in the cost of living.

Incredibly, this simple strategy has delivered some surprisingly strong investment results. In our column “The Permanent Portfolio Revisited”, written with Addison Wiggin, we provide a bit more detail about Browne’s Permanent portfolio, followed by a few questions:

1) Is Harry Browne’s original allocation still ideal for today’s macro-economic environment?
2) If not, how would you revise his original allocation for the next 30 years?

Please read on here, then submit your own version of the Permanent Portfolio.

Eric Fry
for The Daily Reckoning

Author Image for Eric Fry

Eric Fry

Eric J. Fry, Agora Financial’s Editorial Director, has been a specialist in international equities for nearly two decades. He was a professional portfolio manager for more than 10 years, specializing in international investment strategies and short-selling.  Following his successes in professional money management, Mr. Fry joined the Wall Street-based publishing operations of James Grant, editor of the prestigious Grant’s Interest Rate Observer. Working alongside Grant, Mr. Fry produced Grant’s International and Apogee Research —  institutional research products dedicated to international investment opportunities and short selling. 

Mr. Fry subsequently joined Agora Inc., as Editorial Director. In this role, Mr. Fry  supervises the editorial and research processes of numerous investment letters and services. Mr. Fry also publishes investment insights and commentary under his own byline as Editor of The Daily Reckoning. Mr. Fry authored the first comprehensive guide to investing internationally with American Depository Receipts.  His views and investment insights have appeared in numerous publications including TimeBarron’sWall Street JournalInternational Herald TribuneBusiness WeekUSA TodayLos Angeles Times and Money.

Special Report: Wait until you see what could happen in America as early as this MAY… An unbelievable phenomenon is set to sweep the nation as early as this May… The railroad, steel, and technology age – this phenomenon triggered them all. And now it’s taking shape again! Watch this special, time-sensitive presentation now for full details on how it could affect your job… your lifestyle… and your wallet. Here’s How…

Read more: Successful Investing Strategies in a Government-Centric Market