-- Posted Friday, 7 August 2009 | Digg This Article | | Source: GoldSeek.com

Rick’s Picks

Friday, August 7, 2009

“Phenomenally accurate forecasts”

Cramer says commercial real estate has bottomed, and Abby Joseph Cohen evidently thinks we’re in a new bull market. The uncharitable thought, “Idiots!” springs to mind, but neither of these celebrated commentators lacks for brains, as we well know. Abby is simply following a how-to-succeed script that she wrote years ago and which has made her rich and powerful, to wit:  Remain outrageously bullish no matter what the economy is doing, and sooner or later investors will embrace your every utterance as though it were the Sermon on the Mount. She was out-of-fashion and nowhere to be seen in the late stages of the dot-com crash, and missing in action once again when the stock market collapsed last year. But Abby is back in the spotlight now, and doubtless attracting hordes of investors who are hoping with all their hearts that she’s right. Of course, it doesn’t hurt that her sponsor is Goldman Sachs, a firm with enough clout to move heaven and earth if nothing less will suffice to make her predictions come true.

Abby has an acolyte in the ubiquitous Larry Kudlow, a guy who would say virtually anything to get his mug on television. But Cramer tops them all with his frenetic, high-decibel broadcast that seems to echo in the room even after you’ve turned off your TV. Cramer is a guy we love to hate, but in the end, because he’s so entertaining, we give him a free pass, even when he says things that flatly contradict the reality we see all around us. (Have you visited the local mall lately? Companies that decorate the windows of vacant shops are probably among the few growing businesses in the retail sector.)

Cramer clearly is not the only person who sees good times ahead for commercial real estate. Notice in the chart above that prices have nearly doubled since March for the Dow Jones REIT Index, a good proxy for real estate-based assets. The rally steepened this past week into a parabola that looks like a blow-off to us. It’s possible that Cramer’s enthusiasm helped turbocharge the buying. We’re not suggesting that you go against the tide by betting against him – only that you trust your own observations to tell you whether such heedless exuberance is warranted. We think not, but there is no doubting the power of hope when it comes to transcending mere facts. That’s why the stock market has been on a holy tear since March. Go with the flow if you can’t stand being in cash, but be sure you’ve got an escape route if sanity returns with a vengeance, as it surely will.

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Rick's Picks publishes a daily trading newsletter for gold, stock, commodity, and mini-index traders 240 times per year. 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 © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Friday, 7 August 2009 | Digg This Article | Source: GoldSeek.com

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