SCHIZOPHRENIA on Wall Street! - A Vital Primer for You

WARNING: This is more of a lesson or primer than it is a blog entry. We'll try to get it up on the website, which will be more appropriate. But for now, settle in and learn something I believe is vitally important to your understanding of investing and the markets.
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If you've been following our show (tons of podcasts below) you know that I believe that the stock market is irrational, and by and large rigged against the average working Joe buy-and-hold investor. For the last 10 years that strategy has made you NOTHING in the markets.

So has Obama fixed it all now? Why can't Wall Street seem to decide?

Well, I want to give you just a little primer. This is a lesson on CONSUMERISM. I'm sure I don't need to tell you what consumerism is, and how it could affect Wall Street. What I want to tell you is how to look at the CAUSE and EFFECT of Consumerism.

What you see below is the Wall Street Journal version of today's crash on Wall Street of over 200 points. In this, you'll hear about how this volatility revolves around these core concerns about Consumerism.

THE SERVER OF THIS VIDEO CAN BE PROBLEMATIC. Here's a direct link if you have trouble http://online.wsj.com/video/news-hub-anxiety-returns-to-market/1EE54E5D-7F99-4533-97A5-63B954F9F365.html


Okay, now I'm willing to bet that what you see is what the commentator sees (because he's the one talking to you, obviously). But what I see is something different. (Hey! Maybe that's why I have a radio show on this stuff!)

Just about all the commentators are talking about the Cause and Effect of "The Stimulus" or the "Strength of the Recovery". But these are SHORT TERM causes.

As for longer term causes, one area you could look at - i.e. that you NEED to look at is "Why did this banking system collapse in the first place?" On this topic there is lot of good work out on the market. One of my favorite authors who predicted the Real Estate and Credit collapse as early is 2003 is John Talbott. Here's a link to his books through Amazon. http://www.amazon.com/John-R.-Talbott/e/B001ITYMME/ref=sr_tc_2_0 I also conducted about a 40 minute interview with him for the show about 9 mos ago, and I can post that to hear if you're interested. I don't agree with everything he writes, but his analysis points are very strong and enlightening.

Also, the PBS documentary Frontline, has done several excellent pieces on this. Inside the Meltdown is a good one to start with, although there are several more you can find at http://www.pbs.org/wgbh/pages/frontline/.



So the Frontline shows and Talbott go back to the years just before all this happened and tell you many of the underlying causes and circumstances of the collapse, so you can understand what we are recovering FROM.

But now let's go back to CONSUMERISM. Like it or not; whether you believe it is a virtue or not; it seems that our current American economy and certainly the investment markets hinge upon the health of consumerism, as your heard in the first news story above. But what drives long-term trends in consumerism?

What if a I told you that there is a force of nature effecting consumerism trends that is so large, and so inexorable, that nothing the government can do at all will change it? Not tax changes (up or down), not stimulus - nothing!

Well, I believe that there are several such forces. The National Debt is one of them, and is man-made, or rather stupidity made. And I SO want to write you more about that and I will. But the one I am talking about is Nature-made. It is that fact that by far the greatest demographic majority in this country; 78 million or our total 300 million people are of one generation - The Baby Boom. Hold on - don't zone out and say "I've heard all this" because unless you've studied the work of Harry S Dent, you have not.

Now I'll give you more about this on the show, and in upcoming blogs, but I want you to watch the following video on the basis of the Dent Method of forecasting, because it is really about the long-term.

And you will see, as I cover more of this, the long-term projection for Baby Boomer consumerism is that into the coming decade of the 2010's, there is just no way anyone is going to revive trends in consumerism in this generation, which may not be The Greatest Generation, but it is certainly The Biggest Generation.

CLICK HERE to view the presentation.

If the presentation is problematic at all, CLICK HERE to read about the Dent Method from their website. (The video can also be launched from there.)

If You Play the Market - PAY ATTENTION!

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The father and son Securities Broker team of McKelvey Financial have the distinction of seeing the COMING crash of 2008-2009 and getting their clients out BEFORE the hurt.

Learn how Lynn & Ed McKelvey manage to PAY ATTENTION to 52 sectors of economic data on a monthly basis, and reject the idea of "Asset Allocation" "Annual Reviews" and "Portfolio Rebalancing".

I assure you, it's NOT the "Buy and Hold" approach your lazy broker indulges in, when they're too busy to think about what your money really means to you and the risks you take.
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