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-- Posted Sunday, 19 April 2009 | Digg This Article | | Source: GoldSeek.com
There is much gnashing of teeth among financial analysts this weekend who are pondering whether the sudden recent rally in stocks is sustainable, and could go higher than its already record level, or whether this is just an uptick on a long road to the bottom of a great bear market. Commentators look first at a few over-hyped ‘green shoots’ of recovery and a little optimism in one or two financial statements. But for every green shoot there still seem to be several unpleasant new weeds in the garden. Take the $27 billion bankruptcy last week of General Growth, the second largest US mall owner, one of the biggest bankruptcies in the history of US real estate; or calls by the bond holders of MGM Mirage like billionaire Carl Icahn for that Las Vegas casino operator to file for bankruptcy. MGM has debts of more than $13 billion, and Dubai as a major shareholder. GM doomsday Also pending is the possible bankruptcy of General Motors if it fails to come up with a viable recovery plan by the June 1st deadline, and similar pressure on rival Chrysler to conclude its proposed marriage to Fiat. All is clearly not well in the real economy, and the optimism of Wall Street looks premature to say the least. If the pattern of the Great Depression is carried through stocks will tank again in June and the final bottom not be reached until mid-2011. Trading rallies In a bear market you can certainly make money trading the rallies. But it is also easy enough to lose money if you mistime them because the general direction of the market is down, so there is nothing to bail you out if you mess up. Investors in a bull market often forget that the lion’s part of their gain is due to the general uptrend in which any idiot can make money. In a bear market the trend is not your friend and you are out on your own. This can make an idiot of the best investor. Will those who choose to sit on cash and gold over the next couple of years emerge in better shape than the clever shorts and traders? George Soros says that actually very, very few investors can make money in these markets, and perhaps that means that unless you are another Soros you should not be trying.
-- Posted Sunday, 19 April 2009 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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A Rally Comes Before a Fall in a Bear Market, Follow Soros
