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  • jaquecroissant jaquecroissant Jan 3, 2011 10:53 AM Flag

    2011: Goldilocks Economy Good for Stocks

    You know me Musket, I'm with you 100% on the market.

    What do you think of shorting municipal bond funds of California, etc. as a play?

    Things like MUB, NVC.

    There are probably much better ways to make money but do you think those closed end muni bond funds will underperform the S&P over the this year?

    I'm liking GOL as a Brazil play. I like your other choices such as GGB....good one.

    HOW bout the dry bulk and oil tankers? DRYS, GMR, FRO, etc....


    Cheers from Frenchie.

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    • Bon Jour, Frenchie!

      GOL should be fine. GGB should be very fine (check also SID). Short Cali Munis?... there are much better and more productive ways to use your capital and get better returns. (Disclosure: I am short Treasuries via TBT... just a small position b/c it is a no-brainer.)

      I have been in and out FRO. I have been in and out DRYS and only lost money --- the CEO is a crook. My only shipping play at this time is TOO -- which is really a deep-water oil services play with a very high divvy... an income investment. My feeling is that shipping has far to go before capacity and pricing tightens... there are much better and safer places to invest now. Financials, Material, just about everything.... Small and mid-cap tech is going nuts today... STEC, AKAM, ASYS, BRCM, FNSR... I think you brought ISRG to my attention... doing great today.

      I love this market. Chicken Little can fry! Thank you, Ben Bernanke, you are the man! There is just no doubt that Obama is the greatest President since Bill Clinton. Except for Wall Street bonuses, impunity for crooked CEOs and tax breaks for the rich, the USA is the best country in the world, even better than Brazil (LOL). Winnie, you can go live in China tell us what it is like... but I bet you will be leaving your money in the USA.

      • 2 Replies to musketeernumberone
      • Musk, I never said I wanted to live in China...

        Just that I feel that I need to recognize where the economic drivers are.

        And they aren't just in China.

        I personally think that you are mistaken as to what has really driven your recent good performance in the markets.

        I'm not complaining as I 've had some very nice results lately too but for me this good performance is not driven by economic prospects related to either the US or other developed economies.

        Stock market performance in the US is a very narrow gauge (and ST indicator) and things could easily turn on a dime.

        Economic performance OTOH, is what I like to follow and I have serious doubts as to how sustainable the market gains will be in the US once the numbers from Main Street come in over the next year or 2 atleast.

        IOW, I doubt that we will get follow through in the real economy as the stock market seems to be predicting.

        Guages such as real GDP growth (3.5%?) and job creation are things that I think will disappoint.

        And should interest rates dare go up because of credit concerns... or Bernanke is forced to stop supporting UST's, look out below.

        You can trumpet Bernanke and US policy all you want but the way I see it, there is nothing for Main Street to be excited about.

        Policies and bailouts that help banks on Wall street have little effect on Main street.

        You might explain just how you think this transmission mechanism works in the domestic economy because from my point of view, it does more harm than good.

        And I would add that policies such as continuing and extending unemployment benefits to people who are unemployed and allowing them to sit at home doing nothing are the types of policies that will continue to hurt the dollar.

        Really kind of of simple.

        Give money for nothing, it devalues its worth and the longer we keep doing it, the more we devalue its worth.

        We have no imagination among policymakers today.

        The unemployed should be made to do something (anything) that creates value in return for benefits otherwise the value of money gets cheapened.

        (Don't get me wrong, I do not think that the govt should increase it's level of employment and influence in the economy. Absolutely not.)

        It takes imagination and honest leadership at the state and local level to decide on projects that might have lasting benefit and fund the private sector to do the work.

        Mind you, I wouldn't expect much more from all the economic illiterates that have a hand in policy these days.

        Their agendas have nothing to do with Main Street anymore.

        Believe what you will and enjoy it while it lasts but if you can't recognize the real reasons why your stocks are doing well, you might find you get bit in the back side if you have your eye on the wrong indicators and trends.

        Bernanke's liquidity on Wall Street means little to everyday Americans.

        All that does is give them money to invest internationally or in commodities.

        Heck, with Bernanke's added liquidity and help for the banksters, they are probably also shorting bonds and the dollar now so that magnifies their US- denominated returns.

        Wins

      • Thanks Musket! Yes, I think you are right on those munis.....far better ways to make much higher/safer returns. ISRG is a great company so I feel like I got in at a decent price(cost basis of 256).

        Those tankers always look tempting to me but at this point I'm more interested in the "return of capital" than the return on capital haha....well, lets just say I'm playing it much safer these days. Great managements are key to any great company. APPL looking decent today as well. I'm positioned to ride out this year with a bit of dry powder if a correction occurs down the road.

        SID looks like a great play thanks! I missed STEC when it was around 12......I should have jumped in....oh well.

        Cheers

 
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