This Week in Barrons – 11-4-2012
“An entrepreneur must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them.” ... John Maxwell
I have never gone to war, but I’m getting a real sense of total devastation when I see what Hurricane Sandy did to New York and New Jersey. It's one thing to see it on TV. It's quite another (as many of you have written) “to be standing in water up to your waist, using a chainsaw to cut an oak tree out of your neighbor’s bedroom.” You tell me that about half of the cell towers are out of service, and some towns won’t have power for another 3 weeks. Some of you are still prohibited from going back to your neighborhoods to even assess the damage – my thoughts and prayers go out to all effected.
Due to the hurricane and the shortened market week – allow me to address some listener’s e-mails.
Concerning the election DS writes: Berry and Bickers, (Political Science Professors at the University of Colorado who have correctly predicted the presidential winner since 1980) are predicting a landslide victory for Romney. Others such as Porter Stansbury predict an Obama victory – followed by a mass explosion of our national gas industry. He recounts that Obama will use the natural gas industry to make US fuels an ‘in demand’ commodity the world over – and consequently will use it’s taxes as a way to cure the debt/fiscal crisis. A third viewpoint by TL says that we potentially won’t know for weeks who wins this coming election – as it will just be too close to call. In any case – need I remind you to get out and VOTE on Tuesday.
SB was kind enough to remind me of something Mark Cuban (a Pittsburgh native) wrote 4 years ago. If you believe that small business is the engine of jobs and growth it’s definitely worth repeating: “Entrepreneurs who create something out of nothing don’t care what tax rates are. Bill Gates didn’t monitor the marginal tax rate when he dropped out of Harvard and started Microsoft. I doubt that any great business or invention started with a discussion or even a consideration of what the current or projected income or capital gains tax was or would be. Entrepreneurs live to be entrepreneurs. Entrepreneurs live for the juice of having a vision and fighting to see it come true, thinking ‘mission accomplished’, and the scoreboard of the financial rewards. I have never had a discussion with anyone about starting a business that included tax rates. If anyone that wanted an investment from me made a point of discussing tax rates as an impact on their business, I wouldn’t invest in them - ever. Honestly, it doesn’t matter what our Presidential candidates and their economic advisors come up with – it’s meaningless. The cure to our economic problems is the Entrepreneurial Spirit of All Americans. Instead of bitching at each other, could one Presidential candidate please show even the least bit of leadership and character and stand up for and encourage the entrepreneurs in this country? Could our candidates stop yelling at each other, start looking at the American people, and encouraging the best of who we are? That person is the one I want to get behind. The best time for little guys to start a business is when the big guys are worrying about surviving in theirs. You don’t need to raise money. You need to be smart and be focused. It’s up to entrepreneurs to start businesses and create jobs. That is the cure to this country’s economic problems.”
And finally JA wrote about some crime statistics surrounding the “goings on” in Australia. It has now been 12 months since gun owners in Australia were forced (by a new law) to surrender their personal firearms (640,381 at last count) to be destroyed by the Aussie government, costing Aussie taxpayers more than $500 million dollars. In the first year:
- Homicides increased 6.2%,
- Assaults increased 9.6%,
- Armed robberies increased 44%, and
- In the state of Victoria alone, homicides with firearms are now up 300%!
We have an election looming. President Obama has been doing a good job working with Governor Christie and has moved up in the polls. All the polls say that it’s virtually a ‘dead heat’ so it’s going to be incredibly interesting to see how this all works out.
In so far as the market is concerned, I figured they'd save DOW 13K and they did. Now it's all about the election, and we may very well see the beginning of a big year-end push. If I could see any demonstrable proof of this – I would put some money to work and capture some fast gains. BUT we need to get past the election first and see how the market reacts to the winner. If Obama wins, the markets may ‘pout’ a bit at first (considering all of Wall Street’s big donations went to Romney). If Romney wins, the markets may put on a big show of support. But honestly, until either happens, there is no sense trying to get out in front of this.
Many have written concerning Gold and Silver. This week (as the world sold-off ahead of the election) gold broke down and through the $1,700 psychological line in the sand. I constantly remind myself of the 5-year trend line – shown below for silver. It’s my view (at least in the short term) silver and gold will continue to move along that uptrend. If you are a trader, my advice would be to buy when it hits the uptrend line – and sell approximately 3 months later – rinse and repeat.
In this shortened trading week I did absolutely nothing.
My current short-term holds are:
- SIL – in at 24.51 (currently 24.37) – no stop yet
- SLW – in at 38.50 (currently 39.20) – no stop yet
- GLD (ETF for Gold) – in at 158.28, (currently 162.50) – no stop ($1,674.10 per physical ounce), AND
- SLV (ETF for Silver) – in at 28.3 (currently 29.87) – no stop ($30.83 per physical ounce).
To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm.
Please be safe out there!
Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews. You can learn more and get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com> .
Please write to <email@example.com> to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference
If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower - "taylorpamm" is my handle.
If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: http://www.youtube.com/watch?v=K2Z9I_6ciH0
To unsubscribe please refer to the bottom of the email.
Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article.
Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.
PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.
Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.
All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.
Remember the Blog: <rfcfinancialnews.blogspot.com/>
Until next week – be safe.