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-- Posted Friday, 25 July 2008 | Digg This Article | Source: GoldSeek.com
Rick’s Picks Friday, July 25, 2008 “Phenomenally accurate forecasts”
When the stock market rockets higher on some days and plummets violently on others, we need to remind ourselves that it’s not a Jekyll-and-Hyde performance we are witnessing, but pure, unmitigated Mr. Hyde. A monster. The shills on CNBC may wet their pants with glee whenever the broad averages move sharply higher, but is there an investor in America who actually believes the rallies are predicting better days ahead? What they are in fact predicting is that short-covering by some of the gloomiest traders around is in the throes of flaming out yet again, so that the stock market’s fiendish, tortured soul might be resurrected one more time.
No stock exemplifies the irrational and pathological nature of Wall Street’s thinking better than Citigroup. Here is a bank whose capitalization until relatively recently made it one of the two or three biggest companies in the world, and arguably the most sacrosanct member of the Too-Big-to-Fail Club. Citi shares have been deservedly crushed in the last year-and-a-half, falling from an all-time high of $57 to a recent low of $14. More recently, however, the stock rebounded to $22 in the space of just six days -- a 58% gain! Now, we’ve never put much store in the notion that the market knows all and sees all, and that it has perfect knowledge of all companies at all times. But when you see the shares of a financial blue whale like Citi leap by 58% in a week, you have to laugh when some analyst attributes this embarrassing spectacle to…whatever. A speech by Paulson, a glimmer of hope for Citi’s global operations, word of bold success on the trading desk.
If a time traveling investor from the Sixties were to emerge on this scene and take notes for a few weeks, where might he advise friends to put their money? Precious metals, for sure. But the list would not exactly stretch on for pages. If there is a play on the country’s future, it would not be in banking, or auto manufacturing, or real estate, or retail, or electronics. But what, then?
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Friday, 25 July 2008 | Digg This Article | Source: GoldSeek.com
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