Archives for July 2011
The world can be a dangerous place, but seeking opportunities when fear is high is the proper way to invest. It is a true act of being counter intuitive.
One need not do anything dramatic but adding to “companies” you like in times of market uncertainty is usually rewarded a few months down the road. I believe we have such a situation now.
In my gut, I believe the Obama administration is scared to death of a market selloff and will do anything and everything to move the market higher.
I know nothing in fact to support that statement. It is an observation based on experience, human nature and political survival.
I think you could go down the list of Under $10 Ideas and add shares to any of the positions listed. The last email that contained a complete list was on 7/20/2011 LOTM #29.
Expect some new names to be added to the LOTM Under $10 list in the coming week.
As an industry sector we are shifting our focus towards the Molecular Diagnostics field.
This sector is moving from emerging to mainstream. The time to market (clearing FDA) is faster than drug approval. It is a high recurring revenue industry. Over the next three to five years we believe merger and acquisition activity will be high in the sector.
LOTMs Guru’s Corner:
Bill Gross is recognized as the world’s bond king. Gross very publicly said to avoid US Government debt and in fact sold out of his position in US Government bonds. Recently he has purchased US Treasuries though likely a small amount. Linked here are Gross’s comment on the debt ceiling.
Warning to Washington: Don’t mess with the debt ceiling July 13, 2011 Bill Gross, Washington Post
Diane Swonk, economist at Mesirow Financial. “We expect a re-acceleration in growth from the summer, and 2012 might be a year of solid gains in activity levels, although job creation will remain subdued,” said Diane Swonk July 14th 2011 Reuters
Marc Faber, the author of the closely-watched Gloom, Boom and Doom report in an interview with CNBC on Thursday. “It is mind boggling that people would consider buying 10-year U.S. Treasurys with yields trading at around 3 percent. I don’t think the U.S. will default in terms of not paying the interest on its debt. They will though default via a falling dollar as Bernanke begins printing more money.”
Q: For more than 40 years, you put money in emerging markets. They are accustomed to debt and currency crises. What lessons do you draw from?
Mobius: The fact that the meaning of the Greek crisis is hung too high. How many people live in the country? 11 million. This is a medium sized city in China.
Is the S&P Small Cap 600 on the verge of breaking out? It is leaning in that direction!
The LivingOffTheMarket.com technical opinion on the chart linked here is that the S&P Small Cap 600 (IJR) above hit a new 2011 high price in early July. The current pull back is opportunity to buy before the next higher high which we believe will happen, “if” a debt ceiling resolution is reached. In the event the price of the S&P Small Cap 600 closes below its 150-day moving, sell the trade – closing the position.
The price action of this index is suggesting a debt ceiling resolution will be reach before the Aug 2 deadline.