Friends Don’t Let Friends Buy Financial Stocks

Hart thumping, jaw dropping and ear popping. That had to be your reaction if you have had any financials in your portfolio in the last year.

Look at the chart below, the average financial stock has lost over 90% of its value in the last couple of years. When will the pain end?

2009 Predictions

Here are a couple predictions for 2009, good riddance to 2008 which saw a dismal economy and a negative 38.5 % downward move in the S&P 500.

1. Stock market up at least 25%. The market will rally at least 25% in 2009 but may not finish the year up that much as the bear will continue to hit the market well into 2010.

2. Madoff takes a bullet. Former hedge fund manager Bernard Madoff, whom stole 50 billion dollars in a fraud scheme won’t live to tell about it. Not sure if it will come from a disgruntled investor he stole millions from or the Russian mafia he was rumored to launder money for but there is a bullet out there somewhere with his name on it.

3. Housing market bottoms. The government finally is focusing on the right things to bring a bottom to the market – interest rates. If the government can get long term rates down to a target of 4.5% and keep it there, then housing can finally bottom.

4. Almost all public builders go bankrupt. Most of the big public building companies will dry up and blow away in 2009. That means the DR Horton’s, Centex, Pulte Homes and the like. This will actually be a plus for the economy as it will dry up the supply of new homes on the market- and that is needed to make #3 come true.

5. Huskies win a game. 2009 will be a break through year for the Dwags as they actually win a game.

Blast-Off

You can not afford to be out of the stock market – not even for one single day. The market is going to start a rally very soon and I expect it to carry the DOW to over 11,000. Hop on board and enjoy the ride.

Plump Juicy and Tasty

Tasty was the market this week as it went up for 5 days in a row- something it has not done in all of 2008. I hope this is the beginning of the mother of all bear market rallies. The market has gone down so far and so fast in the preceding 11 months it is due for a major rally. Historically, December has had the largest returns and I expect that to continue in 08.

I have added a couple more buys to the list and now the boat is fully loaded so no more passengers can get on unless a couple get off. So for now we will see where the market takes us.


Ticker........ Buy Date...........Price

UVT .................11/14...................$15.50
QLD ..................11/14 ..................$29.00
UUPIX ..............11/14 .................$7.40
AMD …………….11/28.. ………..$3.28
UYG ………………11/28………… $6.16

Long Dong Ding Dong

The market must not know that I went all in last week; otherwise it would have gone up. I guess I need to send Mr. Market a singing telegram to let him know I have been waiting over 6 months to get long.

Patiently waiting, watching day-after-day as the market continued to fall. At last I saw my chance, as the market made a double bottom and there was blood in the streets I decided to go all in and even leverage up with some 2:1 funds. I was quickly rewarded by the market as it fell another 15% in a week- making my losses 30% with the leverage. No risk no reward. Nothing to do now but pray to the market Gods for that year end rally we so desperately need.

It’s Go Time

The economy is terrible, a deep recession has already started and stocks have been in a bear market for over a year. It’s a perfect storm for a bear market rally. The following stocks have been purchased and I expect at least a 50% gain from them in the coming months.


Ticker........ Buy Date........ ..Price
UVT .................11/14................... $15.50
QLD ..................11/14 ..................$29.00
UUPIX ..............11/14 .................$7.40

Slapping Punks

Slapping punks, smacking losers, and knocking out chumps. That’s what the market was all about in October. Not kind to anyone.

Some of the statistics for the month of October as compiled by MarketWatch:
In spite of the big double-digit gain this week, mostly on one-day, the Dow was down 14% for the month, the worst October since 1989.
October had the most down days in a month since 1973, in the 1973-74 bear market.
It was the most volatile month since 1929.
In one 8-day period early in the month the Dow lost 2,396 points.
The MSCI Emerging Markets Index lost 30% for the month.
Gold lost 18%, its biggest one-month decline sine 1983.

The fist week of the month is usually the strongest part of the investing cycle. My recommendation is to buy QLD at $35 on Monday morning and watch it run up to $45 later in the week at sell for a quick 28% profit.

$$$$$$$ HAPPY INVESTING $$$$$$$