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Commodities: A Gift To My Children

If you’ve been reading this blog for any length of time, you know that I’m expecting to see the stock market take another plunge. So where are we to invest? Commodities, that’s where. Commodities like gold, silver other precious metals, oil, natural gas corn and sugar can not be printed in a few minutes or hours. It can not be manipulated as easily as any government currency. The Federal Reserve is printing money like they’re Kinko’s or something.

I’ve been building up a nest egg of commodities for sometime. It’s not something I’m doing because of the current situation of the U.S. economy (actually I’m am buying more than I’ve done in the past), I’m doing it for my children. My daughters are teenagers and soon enough they’ll be on their own looking to make it in this world. who knows what the world currency is going to look like in just a few short years. If the United States doesn’t do something now to solidify their financial sovereignty, who knows how things will be. Right now oil is traded in U.S. dollars and China and the United Emirates are discussing reducing their holdings in U.S. dollars and not using the dollar has a the way to trade oil.

So what should you be buying? Gold and silver are the best things at this moment that average investors could and should be investing in. Gold is trading this morning at $1,518 an ounce and silver is trading at $34.74 an ounce. I know you’ve heard the advertisments, seen the ads and listened to the stock news programs stating that we should be buying gold and silver. So have you been buying gold and silver? If you haven’t, remove your head from your butt and do so. Yes gold was trading at less than $1200 on ounce last year and silver was going for about $12 an ounce, but they’re going to be much higher next year so don’t waste time.

There’s a new book out from a man who retired at the age of 37 after making his money the old fashion way…he earned it. Jim Rogers worked as a young kid and a teenager, to investing his money in the markets. His new book, ‘A Gift to My Children A Father’s Lessons for Life and Investing’ helps us prepare our children for the trouble times that are coming in the near and the distant future. Jim discusses the troubled times ahead for the U.S. dollar, he actually believes it’s “doomed”. The book is a great source for teaching our children about investing and other life lessons they’ll need to survive in this world.

Click the book to view or purchase.





I’ve been showing my girls how to trade stocks, look into real estate investments and investing in precious metals. This book helps to bring the message home about how important it is for parents to teach their children how to prepare for the future. I feel that too many of the younger generation is not aware of how to be financially savvy. Especially since the public school system doesn’t have time to teach the students how to balance a checkbook, nevermind invest in themselves.

So pick up Jim Rogers’ book ‘A Gift to My Children A Father’s Lessons for Life and Investing’ at Amazon or any bookstore. You won’t be disappointed.

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Federal Reserve Realizes The Condition

After all this time that I’ve been saying that there is no good reason for the DOW and the rest of the markets to be as high as it is, we can see from the comments from the Federal Reserve, we are not bouncing back from the recovery as they and the Obama Administration have been trying to feed us for the last year. The Federal Reserve states that the economy is not growing as fast as they once thought. To make matters worse, the dollar is at a fifteen year low against the Yen.

In the first forty five minutes of trading today, the DOW is down 200 points. A sign that that investors and brokers are waking up to the realization of the fact that we are not out of the woods yet. NASDAQ is also down 54 points in the same amount of time. All together, each of the three idicies have lost roughly 2% in less than one hour.

Of course I expect the markets to jump back up, but that will be from the market makers trying to make some more profits on this sell off. The DOW has moved up to 10,700 in the last week and there should be some profit taking, but this drop is not going to end with a few people taking their profits. I feel that some will start weening out of the stock market in preparation of the correction we’ll see in the second half of this year.

If you are still looking for some trading action, because you love the game of the markets, I suggest that you learn and start shorting stocks and the overall market.

What happened to the stock market today?

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Bankruptcy In America

In America, if a company can’t make a profit and loses money, they have one choice and that’s to file for bankruptcy.  Just because a company is big doesn’t mean that the government has to lend them taxpayer’s money to save it.
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It’s amazing to see how the CEO’s of these big corporations have destroyed the company so much that they need the assistance of the U.S. government and the American taxpayer to save their skin. How can these men with such education be so stupid to take on the extreme risks that they did?
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What I really want to know is how stupid is Congress to keep on bailing out these companies that shouldn’t even be allowed to operate as a business after losing that much capital. Using the excuse that they’re such big business’ within the United States is a lame one at that. Yes, many people will lose their jobs and the unemployment rate will jump into the double digits, but what other choice do we have? Do we keep giving them money until the Federal Reserve runs out of paper to print more? The airline industry went through bankruptcy years ago and they’re still in business (except for Eastern of course).
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Do you really think that if the big three automakers go into bankruptcy that they (or we) won’t survive? We as American people have to not fall for the hype that the CEO’s, Congress and the mainstream media are trying to feed us. Look at all the money that’s was given to the financial industry and now it turns out it wasn’t used for what it was meant to be used for.
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What about the banking system mess? These companies along with Congress have also done the wrong thing to the American people. If it wasn’t for Congress passing all those bills in the 1990’s that allowed the financial sector to lend money out in sub-prime mortgages, we wouldn’t be in this mess.
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What has me really PO’d is that none of the people who are actually at fault, are being held accountable. Hank Paulson, Dick Fuld, Christopher Cox, Frank Dodd, Barney Frank and the President-elect are all to blame for the financial mess. Dick Wagoner, Alan Mulally and the UAW are to be blamed for the failure of the auto industry. I would like to blame Bob Nardelli from Chrysler too, but he just got there (I will blame him for the fall of The Home Depot).
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Capitalism is what this country was built on, if we are to continue as a capitalistic country we need to let companies fall when they fail to make a profit.
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When the decision was made to let Lehman Brothers filed bankruptcy, the company had no other choice but to restructure everything and sell of the assets that they had to clear their debt. If the American automakers are forced to do the same, they too will do what they have to to make the company survive. If they need to sell off assets, I’m sure that there’s an entrepreneur some where in this country that is willing to make profitable business out of the ashes. He could name the first model Phoenix.

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What Will Happen To The Investor Class?

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photo by joe shlabotnik

In this election year we have heard a lot about what will happen to the American people more than I can remember since I’ve been voting (which covers over 25 years). One of the major things being spoken about is taxes and yes it’s a topic that is discussed every election, but with the condition of the economy, it’s more important than ever.
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I’ve mentioned in an earlier post that I’m a Libertarian (a party that doesn’t get the recognition it deserves). I believe that our federal government has gotten too big, it spends way too much money than it should. The one true way to reduce taxes is to reduce spending.
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The reason why I bring this to light on a blog that deal solely with the stock market is that this year we could have our investments effected in ways that will hit us on many levels. If some of these ideas come to pass we may have more money pull put of the markets that will continue to cause the markets to fall.
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Take into consideration that if any one political party was to control the Presidency, the Senate as well as Congress, they would be able to mold the laws and pass bills that could take decades to change. At the present time the Democratic party controls the Senate and Congress. With the way Congress has been sitting on their a$$ for the last two years from all the filibustering that causes the delays in decision making, we can’t afford to let most of the candidates go back to Congress to serve this country again.
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Please be aware of the politicians that were involved with the issues that help cause the collapse of the housing market as well as the credit crisis. These candidates will most likely continue to do more of the same if they were to get re-elected.
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As for the Presidency, below is a link to help you think of a few other things that will be effected if the wrong person is voted in office. Remember Wall Street and Main Street are one and the same. Where does average Joe have his 401K plan? On Wall Street, that’s where we all have them.

Target the Investor Class in 2009

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Great Rally After The Selloff

Today the DOW had one of it’s top 6 days in history after it’s worst week in it’s 112 year history. Everybody is jumping for joy and looking forward to the rest of the week. But let’s be real, I said in my earlier post this morning that the markets don’t turn around this quickly.
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We still have a lot of work to do before we can reap the rewards of what has been done in the financial sector over the last few weeks. I’m very happy from today’s gains, but I’m realistic in the fact that this has to come down from profit takers within the next few days. With my interest in Morgan Stanley, my portfolio is up an average of 25% today.
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What we witnessed today was investors and traders getting in on some great deals after a major sell off last week. Most of the trading wasn’t based on fundamental, but on the fact that many hedge funds and other entities were trying to raise capitol and cover margin calls. no matter what you were invested in (except GE and ABX), you made some big gains.
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If you are up in any stocks at this time, you might wnat to think of taking some off the table for when we will have a down day (and believe me, we will have one soon). It’s better to miss out on some short term gains than to lose out on the ones that you made already.
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DOW @9,387.61 +936.42 (+11.08%
NASDAQ @1,844.25 +197.74 (+11.1%)
S&P 500 @1.003.35 +104.13 (+11.58%)
Oil $81.85 (+$4.15)

Hang in there and happy trading.

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Worst Week In Stock Market History

Unless you’ve been living in a cave for the last week you know that the economy is in deep trouble and it looks like no matter what anyone does, it’s not going to do any better. This has been the worst week in stock market history. The DOW drops over 6% in this week alone, as the NASDAQ falls 9% and look what happened to the S&P 500, it dives 9.4%.
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The week started off bad on Monday (it was the worse of them all) by dropping 777 point on the DOW. Congress couldn’t leave their feeling at home that they went ahead and voted against the “invest In America bill (mostly because Nancy Pelosi can’t shut up) that would have help the American people and gave a little confidence to Wall Street. We heard all week from the politicians that Wall Street and Main Street are two different groups of people. Let’s see how different they are when the residents of Main Street get their 401K statements by November 3rd and realize that their portfolio has shrunk quite a bit in this quarter (which ended September 30th).
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We listened as Citigroup bids and signs the papers to acquire Wachovia, only to see Well Fargo came in with a better offer. Now Citigroup has filed a lawsuit against wachovia because of this issue. All the while the rest of the financial sector takes a slow ride downward all week long. To add insult to injury, when the bill was finally sign by Congress today, Wall Street, with it’s good solid gains for the day, took it all back and then some. For what reason, I don’t know. I guess Wall street lost that confidence they had while waiting so long for Congress to come back to the table.
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So what’s to come next week for the markets? More of the same, I would guess since it’s so evident that we are in a recession/depression period, the smart money is going to start moving their money into more stable vehicles (bonds and such). I myself think that’s a pretty good idea at this time. If you have capitol tied up in stocks, you may want to take good hard look them and see which ones are one that you shouldn’t have during a recession. I’ve read a lot of articles that say that the way to go right now is consumer staples (McDonald’s, Pepsi, Johnson & Johnson etc.). If you own any, hold on to them. If you’re in a stock that is sensitive to the price of commodities, then it might be time for you to sell into any rally you get. Remember, the old saying… “cash is king”. But then again, who knows what’s going to happen to the almighty “greenback”.

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Super-Size My Profits, McDonald’s (NYSE: MCD...

The economy may be slowing down, Consumer confidence is low and consumer spending is dropping, but no matter what people want to go to McDonald’s more and more it seems. McDonald’s same store comps rose last month (August) 4.5% in the U.S. and 8.5% worldwide. I’m not surprised in the news because when you are out and running around (like most Americans) you just want to get a quick bite to eat, Where do you run to first? McDonald’s has made it a point to buy key properties in all cities over the life of the company that it’s hard not to find one when you’re in a rush to grab something.

They are also building new restaurants everyday all over the world so how could they not beat their comps for the previous month. I do expect this to continue on the basis that more countries are eating more American-ized type food and McDonald’s are leading the way.

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As for any other fast food restaurant, they can’t compete with these numbers. Wendy’s stated in August that their same store sales were up, but only 0.01% and in Burger King’s 4th quarter, their worldwide comps were only up 5.3%.

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This is a company that I will look into because if these comps were better than expected, it could mean a good earnings report when they report next month on October 22nd. The stock is up over 10% since the beginning of the year and up30% since it’s low of $49.36 at the end of January. it has shown great returns over the long haul and with a dividend yield of 2.4% who can really complain? I do have some concern with the fact that the dollar has gained some strength and could possibly hurt international operations.

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As with any interest in buying stocks, you need to do your research and due diligence before claiming a stake in the company. Happy trading.

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Cash Is King

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photo by m360


As the saying goes… “money talks, bulls**t walks”. Nothing works better than cash, because cash is king. The American dollar has gained some strength in the last couple of weeks and with any luck it will get better.


Why is it that less and less people over the last few decades have been using cash less? Let’s take a look at what’s been going on during that time period. Credit cards have been the culprit in the drop of use of the American dollar. That’s because as Americans we are living outside of their means more and more each year. We as Americans are getting very careless with our financial responsibilities by going out too much, competing with our neighbors, as well as thinking that we deserve it right now.
For us to get control of our financial future, we need to work on our present financial condition.
We need to sit down and really look at our finances in a realistic manner. How much is coming in? How much is being spent? What is it being spent on? Is this purchase necessary? These are the questions that you need to ask yourself. Instead of saying “I deserve to buy this for myself”, you should ask yourself “have I earned this and can I afford it”?. We all think to our selves that we work so we are able to live and buy the finer things in life, but what good are those items if you are paying more than you should be.


You want to have all the toys that you can afford. You would be able to buy a lot more if you bought all the things with cash than you would if you paid by credit card. Even with a great credit rating, if you don’t pay it off in full the first month your interest rate would be around 8% at best. Typically the average American household has $7000 in credit card debt and the average rate is 18%, so if you only pay the minimum balance due it would take you over ten years to pay it back. Also keep in mind that the balance will generate about $100 in interest fees each month. How are you to make your money work for you if you give over $1200 each year to someone else? If you do the math you will actually pay back over $18,000 to the card issuer.


Paying cash will make it possible for you to add more money to you savings, retirement account, or just make your money go a lot further.
I’ve paid of all of my debt and have lived that way for many years. There are times that I want to buy something, but I hold off in doing so. What I do instead is I will put money in my portfolio and make investment to increase it. When that’s done I will go ahead and purchase it. If you think about it, I end up paying less for the item by having my money do the work for me. The last big ticket item that I bought was a laptop for $1800, I put a thousand dollars to work for me and in no time it made me the other $800. Think about what you’re doing to yourself every time that you buy something with a credit card. Remember that cash is king.

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5 Things That are Affected By A Stronger Dollar

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photo by Earl53


To help understand the different ways that the markets are affected by each other, I’m listing 5 things that are affected by a stronger dollar.


1. As you saw with last week and especially with today, oil’s price will drop when there’s strength in the dollar. Oil prices around the world are based on our currency. I’m not old enough to remember it, but the dollar used to be linked to gold up until 1973. Since then it’s been oil that linked to the dollar (not officially). As our dollar got weaker, the price of oil went up.


2. The exchange rate of other countries’ currency fluctuate as our dollar goes up or down. This year more money is being spent by foreign tourists because the dollar has been so weak compared to their country’s currency. With a weak dollar a lot of foreign investor like India are buying large share of corporations like what happen with Citicorp. This could and should change with a stronger dollar.


3.When our currency is strong our buying power is too. The price of food and other necessities have risen quite a bit this year because of a weak dollar. When our dollar gets stronger it gives us the ability to buy more. The prices of food have risen , but even with a stronger dollar the prices won’t come down to where they were at the beginning of the year (unfortunately that’s the way of life).


4. The stock market has suffer greatly with the weaker dollar. When the dollar strengthens investors put their money to work in the market. The value of the company is stronger and together the market grows.


5. We as Americans feel better about the economy when the dollar is strong. I know that if my dollar goes further, I feel better. I get better deal shopping, I have more to invest, as well as saving a little more (higher interest rates). Overall I feel stronger as an American.


I know that there are many other things that are affected, if you would like to share any of them, please do so in the comment section of this post.


P.S. Want to learn more about the stock market? take a free two week trail with Jim Cramer from TheStreet.com

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Weak Dollar

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photo by ppdigital
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Weak Dollar? Not if you’re a tourist from overseas. The weak dollar has tourist spending more money than ever before. There are less visitors coming here than last year, but their spending has increased year over year by about 20%. That may help us but it’s not what this country really needs.
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What we need is a strong dollar. Today the dollar gain some strength today as oil dropped for the second day in a row. Gold slid back 2% as well, on the news from the Federal Reserve of talks on possible currency intervention. They may even increase the interest rates to help the dollar.
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The markets rallied today. The Dow finished at 11,239.28, climbing over 276 points. We will have to wait and see where it goes tomorrow and going into the weekend. Today’s news helped, but possibly not enough to sustain the rally. I guess we’ll see.
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Today’s performance was mainly based on the financial sector, namely Wells Fargo with a great earnings report. Some of the other banks increased by 10% or better today.
BAC +22% , ZION +22%, JPM +15%, WFC +32%
When banks are happy, the dollar is too.
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The big winners were Fannie Mae and Freddie Mac,. Both being up over 30% today. To think that one could possibly think of them as penny stocks(price being under $10 per share). One should have seen this coming being that Ben Bernanke stated that the Feds commitment to bring stability to the financial markets is a serious one.
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Any one who may have seen the writing on the wall bought into some financial stocks in the last two days. I was underweight in the sector and since the news released on Monday has picked up some shares. I am more than happy with the gains & will be getting out very soon. As for the dollar, I do believe it will strengthen but not in the near future.
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P.S. Want to learn more about the stock market? take a free two week trail with Jim Cramer from TheStreet.com

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