Archive for May, 2008

Buildings of the Future…

I’ve been talking bubble lately, I know.

So here’s another hint…

In Atlanta there’s this tower being built called the Aquarius tower. Want to know why I care about this horoscopic tower? Because it’s going to feature…

- A five story wind tunnel with 60 turbines
- Rooftop solar panels
- Heavy use of recycled materials
- Thermally-efficient products
- State of the art robotic valet system which automatically stores and retrieves cars, saving on CO2 emissions.

This building will cost about $70 million, will have condos and businesses inside, and be completed around late 2010.

Think about this hint for a little bit and don’t worry… I’ll give you another one soon.

: )

The Next Bubble

I have to thank everyone for their comments. I actually received more than I expected.

So before I go into what I think the bubble is, let me talk first about what isn’t the bubble.

And first on that list is oil. Sure, oil prices have been shooting far higher. And I have to admit, they have further to go. But what has government done to make it easier for oil companies to do business? Not much.

And in fact, if a democrat is elected, you might see a windfall profits tax hit oil companies. Furthermore, oil companies know that dinosaur fuel isn’t the fuel of the future.

Lastly, oil would never cause a massive cultural phenomenon like housing and the internet did.

So while I think oil prices are heading higher long-term, I think they’re doing that based on fundamentals, not a bubble.

Another big one posted here was Nuclear. While Nuclear plants are being built, the U.S. hasn’t done much in making it a lot easier to make a power plant, permit it, etc… Sure, one bill passed, but it wasn’t nearly enough.

Lastly, can you see nuclear ever becoming a cultural phenomenon like the internet and real estate were? I don’t. Too many people hate nuclear to love it.

So what is the next big bubble? I’ll be back to tell you. But here’s a hint: a lot of people were very close to calling it in the comments on the previous post.

Another charge for 13,000

That’s what it seems like the Dow wants to do.

Whether it will actually break through is another question altogether. Normally, I wouldn’t bet on a breakthrough. But the market is acting dumb enough to actually make a breakthrough semi-possible.

Regardless of how I feel about that, I feel that the Dow will NOT break past 14,000 anytime soon. Probably not until next year or the year after.

A few days ago I talked about how there was another bubble in the works. I said I’d give you more information in a few days. So here’s a hint…

The internet bubble was possible thanks to government legislation (no taxes, etc) that helped it along. The internet bubble could also create wealth out of thin air. And it drove a cultural revolution.

The housing bubble was possible, again, thanks to government legislation (no-doc and interest only loans). The housing bubble was fueled by the thought that home prices couldn’t drop. It started a whole cultural phenomenon (HG TV).

So what’s the next industry that is receiving some pretty nice government legislation, could go on for YEARS, and is starting a cultural phenomenon?

I’ll let you think about that for the next few days. But do me a favor – if you think you’ve got the answer, comment below!

A Soothing End to an Exciting Day

Have a seat.

Want a beer? Be my guest.

I hope you like the Black Crowes, because that’s what’s on right now.

You see the market action today? I tried not to pay too much attention to it. You know, I just have to much stuff to do in a day.

Yet even with everything I had to do, I kept glancing at my screens.

Precious metals were up on the day. Agriculture companies too. Let’s not forget about the rally solar companies had, some rallying five to ten percent.

That one company I bought into my personal last week is now up well over 12.4%. That was an Ag company.

Still, when I saw the market down another 100 points this morning, I thought I would see more of what we saw on Monday.

But the bulls weren’t having it. They recovered the losses and took the market up 50 points. Not bad for a day that was supposed to end bad.

You see, and this is why I’m not fully bearish anymore. Too many negative days turning positive. Too many positive days turning negative. It’s just not worth it to be a bull or a bear.

You have to get into genetic engineering and be a hybrid ‘Bullear‘ or ‘Bearull‘ if you want to survive this market.

With that said, there are some AMAZING opportunities in the solar sector right now. And I plan on taking advantage of some of them in the next few days.

Also, in a few days i’ll start talking about what I believe will be the next big bubble. Its already getting big, but in the next 4-8 years it’s going to explode.

Until next time.

Toyota’s so sweet!

Today I heard some news that made me giddy.

This is what I read at Scottrade…

Toyota today announced a contribution of more than $1 million dollars and five vehicles to Everglades National Park to support environmental education programs. The donation will benefit more than 10,000 students annually via a number of initiatives including day program field trips and camping trips for grade school students; the K-12 Miccosukee Indian School program; in-park teacher workshops for day and camping programs; in-park special programs for other school groups and student organizations; and in-school teacher workshops.

Go Toyota for rockin it at the Everglades! God knows we need all the money we can get down there to keep the sanctuary thriving!

Here’s What Yahoo Bulls Must Feel Like…

That whole Microsoft / Yahoo deal was so half-baked anyways. And to think Microsoft actually offered to give Yahoo MORE MONEY! HAHAHAHAHAHAHHAHAHA.

Makes me think twice about Microsoft management, that’s for sure. This would have been the dumbest buy of the century.

And to think, people were buying up Yahoo because they thought Microsoft would make some type of amazing, take-all-my-money offer.

Those Yahoo lovin bullish Fools!

They Keep the Party Moving…

Those bears I mean – not the bulls.

Which seems a bit funny to me. The party was all ready to go. Champagne was uncorked (an expansion in services!) and the favors were everywhere (Greenspan and Buffet both feeling better than bad about the economy), yet the bulls were nowhere to be found.

With an empty party, who do you think came to drink the champagne and party? The bears did. And they didn’t hesitate, taking the market down 100 points. And the market hasn’t been able to recover that very easily.

What do I think about it? Well, I went in and crashed the party. I didn’t care who was throwing it, i’d put on a costume and walk in, grunting in bear like manners if need be.

Made some money on my positions, although i’m not celebrating a damn thing.

It’s not like half a percent is anything amazing. Quite frankly it sickens me. But let’s see…

The Dow broke through it’s downward trend line. Although i’m wary of any big gains because the market’s overbought. Then again, it was overbought throughout most of 2007 too. So whatever.

Then there’s the vix which has been moving lower and lower. It seems to me like this market is trying to setup another rally to 14,000 (crazy, right?). But the market would be hard pressed to break 14,000 on the back of a crap economy.

Regardless, profits sometimes come from both bulls and bears. So the key is to always stay open to receiving them from either the bull or the bear.

Oh, and has anyone seen the dollar lately? Broke 73 finally! Although I still think it’ll have some resistance at its 100-day. Waiting until we hit oversold levels and i may end up being a buyer.

Mainstream Media is SO Late on This

So a few weeks ago I wrote an article bashing the McCain gas-tax holiday plan.

My conclusion was that the gas-tax did absolutely nothing to fix the reason that gas prices are higher. And in the end, all it would do is spur more demand for gasoline, meaning prices would go even higher.

And lastly I talked about how the only thing you’d have extra money for are the higher food prices you’ll have to pay.

Well, now the mainstream media is catching on, albeit a few weeks late. Today I saw this Bloomberg article.

Let me take an excerpt, because it looks like these people are reading IDE everyday.

Economists have a different take: They say the oil companies may end up the biggest beneficiaries, while the aid to families wouldn’t be enough to buy a $35 backpack.

The trouble with the plan, they say, is that oil prices are rising because of low supplies, and companies will continue to charge the average $3.60 a gallon and just pocket the money that would have gone to federal taxes.

“That’s $10 billion, and it’s going into the pockets of oil refiners,” said Leonard Burman of the Tax Policy Center in Washington. “The last time I checked, they didn’t need it.”

As it appears now Clinton is joining the gas-tax holiday bandwagon. She thinks that this tax somehow takes excess profits away from oil companies. Um, last time I checke a tax holiday takes money away from government. After all, they’re the ones taxing!

And then McCain thinks this holiday will somehow give parents the money they’ll need to go back to school shopping. What does he think, that parents fill up their tank twice a day? This money won’t be anough for a damn thing!

Oh well, asking the government to be logical is like asking a kid to not eat chocolate.

Today the market looks like it wants to push much higher. The Fed announce an expansion of their term auction facility (now they’re loaning $75 billion instead of $50 billion) and unemployment numbers came in less than expected.

Makes me happy that I got into three recent long positions and they’re all doing well. In fact, the one I bought in my personal account rallied nearly four percent from my buy point!

Hopefully today ends on an up note.

Dazed and Confused

Market has no idea what to do today.

Should the market rally because the economy might do better? Should the market tank because interest rates might not be cut again?

If anything, I think this recent rate cut added more uncertainty to the market. That’s because the certainty of a rate cut is now gone. And the certainty of the economy doing better was never around to begin with. And now that earnings season is coming to a close, the only thing left for the market to pay attention to is economic news.

That and world news.

With that said, I heard that first quarter GDP came in better than expected on the back of inventory building. So the thought goes that next quarter inventories will be fine, which means no more orders for more inventory.

Needless to say, economists expect a big contraction, even with the tax rebates. If we get a big enough contraction, then the bear market would be in full swing.

Better yet, if the economy doesnt start improving by summer, the market is going to be lost. Right now traders are trying to predict a recovery in the second half of the year. Yes, a recovery.

This ain’t 2001.

With that said, here’s a song that I feel the market is feeling right now.

And Jonathan – you should be happy because its Led Zeppelin!