Our Outlook for stock market and Gold

                                           Markets…What we expect…what to think about…

My analysis still suggests that we face the risk of a harsh bear market….the brokerage house stooges and some of the business television (but not all) never offer prudent advice that some profits should be taken to await better buying opportunities. That advice rarely occurs as it interferes with their commission needs and advertising revenues. It also interferes with brokerages’ corporate finance relationships.

It depends where you live but generally we do see prices in many consumer items rising. However, in many items, if buyers shop carefully, they can find lower prices……but work and patience are needed.

Twenty-year ago, I wrote that I expected inflation in some items and deflation in others. Examine the prices of homes, automobiles, medical costs and inflation is obvious. And keep in mind that $100,000 in the year 2000 today has a purchasing power of between $66,000 and $70,000.  Thus just since 2000 the US Dollar has lost approximately 30% of its value which has gone on for most of the last hundred years. Money creation has been the primary cause. Since 1915, the US Dollar has lost 94% of its purchasing (buying) power.

Have you ever noticed that the insider (the officers and directors) purchases and particularly sales of their very own companies’ common stocks are rarely if ever reported on business television?  Again particularly their selling. The fact is that reports of “insider selling” convey  a negative view of the stock(s) and the market and their advertisers do not want it reported……..it can cause a decline in buying volume and perhaps increase the possibility of bringing about a bear market. Solution? You have to do the insider tracking research yourself.

Small  caps…Major banks and brokerages do not often recommend small cap and stocks that do not offer enough liquidity for large purchases and sales; thus limited profitability for the banks and brokerages limits the ability of the small caps to attract brokerage  research.

 While the misguided and ill-advised public rarely takes profits, the hedge funds and high frequency traders which are generally 80% to 90% or more of the volume are exiting rapidly and in front of the average investors, yes it is front running. Moreover, tax implications are less punitive for the trader types which are taxed at a far lower rate than the average private investors.

Again we find it odd that business television cannot find it as it would be in their viewers’ interest to report occasionally that officers and directors of companies are still selling their own shares at one of the highest levels in history…….

Normal corrections have been seemingly “outlawed” in a sense as countries’ Central Banks heavily invest in every stock market thus not allowing for normal corrections. This has created sharp overvaluation in many stocks. Worse yet, the major brokerages focus upon what is popular and profitable to them, not what is undervalued…as always!

Cyclical analysis for both and long term and short term cycles suggests that we are making a major top for the industrial stock market and are about to commence a long bear market. The cycles are also suggesting a huge bull market for commodities. Cycles can be wrong but have a habit of occurring on schedule with a vengeance.

Bottom line?  I am concerned but there are and will always be opportunities for investors.