That Funny Little Feeling
Mike Hoy
October 12, 2004
I feel that this is a very timely article simply because the
elections are winding down to an end and a whole new party may
be about to begin. For the past several months I have had an
uneasiness that just never goes away. This uneasiness is centered
in the back of my mind and I just can't seem to kick it. I think
I know exactly what it means, in the end, but on the interim
I have no idea of the timing, games and stupidity that can happen
to postpone the inevitable. The most important lesson I have
learned over the last twenty-five years is patience and I have
still yet to master the art of patience.
I believe the "esf boyz" have been very hard at work
for a very long time. I think that the web they have been weaving
has trapped more people than we can possibly imagine. The most
ironic point to this is the fact that it may not be finished
yet. I believe a very small possibility exists that the spinsters
could talk themselves into one more rally in the traditional
markets. I think the odds are against them but I think the possibility
exists just because I give the market credit for wanting to devour
every morsel of food on its plate as well as all leftovers; it's
the leftovers we are talking about getting into the game now.
I think another rally would be all it takes to suck all available
outside funds into the market, for the final burial. It would
be like the NASDAQ hitting 5000 back in 2000. I believe that
this up movement would be no-where near as powerful as the movement
of the NASDAQ in reaching 5000. Whether this happens or not is
irrelevant to me because I have no intention of even thinking
about being long the traditional market. If the market does rally
I believe that this may be the last opportunity to sell at prices
we may not see for a very long time. Again, I mention NASDAQ
at 5000 for a reason.
Now back to that funny little feeling; I don't know if any of
you have these feelings but once in awhile I do get them and
I have learned to listen to them. This feeling is a little like
the feeling you have when you meet someone for the first time
and you shake hands with an individual with a cold and lifeless
handshake. There is something about a firm handshake that tells
the other party that you have substance behind your make-up and
you are glad to make their acquaintance. There is also something
about a lifeless handshake that sets off all kinds of alarms
with me. I hate weak and lifeless handshakes; they show a lack
of true character to me and raise all kinds of red flags.. A
person giving a weak handshake really has no knowledge of what
shaking hands is all about and I find it a little insulting that
the other party thinks so little of himself to not show others
what he or she is made of; unless they truly have no character
in the first place.
To make this long story short I find it difficult to willingly
give my trust to someone like this without first having taken
the time and special care to learn more about him or her. For
those of you who may be timid and shy I do make exceptions for
and understand how personal contact can make you feel uneasy
and I apologize if I may have insulted some of you. It is amazing
how often this feeling is proven correct. It is easy to assess
this feeling in just the first few minutes of being introduced
to someone new. I will never understand how someone does not
understand that the first few minutes in meeting someone are
so important and to allow a slimy handshake to leave such a negative
impression is beyond me. I want my handshake to let people know
who I am. I like meeting people and I hope they like meeting
me.
That funny little feeling is now reminding me that we are now
in the month of October and historically there has been some
very ugly things happen in the month of October. This time around
could be no exception and the way the table is set I think an
October or November massacre could be in order. The only reasons
I believe things have not gotten real ugly so far is the fact
that the incumbents would not be happy with the outcome. There
is no question in my mind that the boyz have done everything
in their power, for quite some time, to make sure that all economic
data show, what they feel to be, improvements in the economy.
Whether or not they are successful through the elections makes
no difference to me as I believe that anytime one can exit a
stock position within or buy within 20% from the ultimate top
or the absolute bottom an average investor has done well and
will be happy over time; the 60% in the middle is a pretty good
return. Unfortunately most investors usually get most excited
when the stocks they own are being bought at or sold at the 20%
range on the wrong end of the totem pole. It gets back to that
emotion thing that I have talked so much about in the past. Do
not be fooled by the "spinmeisters" when they try to
suck your hard earned capital into the markets after a small
correction has ensued. I can clearly remember, and still have,
a release from the brokerage firm that I worked for back in the
past that sent all its brokers a release after stocks had pulled
back by 25%, pounding the table for their brokers to
step up and take advantage of the weakness in their favorite
stocks.
I will never forget the wording, it goes like this, "hock
your family jewels and margin your accounts and double your positions."
Their two favorite companies were $16 and $18 per share respectively.
By the time it was all over the $18 stock was broke and gone
to the world and the $16 stock was bought out at $6. The margin
calls never ceased until positions were sold out. The same thing
will happen all over again as the market breaks down. For traditional
investments and investors there is a time to make money and a
time to take care of your money; for traditional investors, now
is a time to take very good care of your money. There is absolutely
nothing wrong with a 1%-1.5% return when all other traditional
returns are negative. For those of you who believe that the metals
and natural resources are the place to be; you will be handsomely
rewarded, in my opinion, when the true picture of what lies ahead
continues to unfold.
Anyone should be able to understand that rising interest rates
and rising oil prices are going to have severe negative effects
on our economy over the long term. As consumers are forced to
pay more out of pocket money to drive their cars, heat their
homes and for some corporations, manufacture goods; leaving less
money for the toys and leisure items that the consumer has become
so accustomed to having. At the same time as interest rates rise
the housing market will inevitably take a turn for the worse.
It is no accident that Fannie Mae is having the problems they
are having now. Do you see what I mean? None of this is rocket
science and anyone can figure it out if they are not running
for public office or being paid by or should I say "Bought
Buy" the securities and financial sector. This is a time
to sit back and listen to that funny little feeling as it may
have something very important to tell you.
This, I believe, is a time when the gurus should step up to the plate and caution investors
about the risks associated with traditional investing. There
is another factor I believe that we should consider and that
is the fact that George Bush is not too popular with the terrorists
and I feel that the terrorists would be happy to exchange him
for John Kerry. Whether this is a good thing or a bad thing is
not the point; the point of this is the outcome of the elections
in Spain and how they were influenced by a terrorist attack.
We should be on our highest individual alert as I think the possibility
exists that the reason we have seen no domestic terrorist attacks
since 9-11 is the fact that they may have been waiting for the
proper time to hit us when they have the absolute most to gain.
I hope I am dead wrong but we do need to be alert as the possibility
exists that we may catch them before they can strike.
That same funny little feeling is also telling me that the next
leg of the bull market in metals is ready to begin. I feel there
is no question that the policies of our government, be they Republican
or Democrat, are going to be hyper-inflationary. These people
will do anything and everything they can to keep the economy,
market and financial industry afloat for as long as they get
to make the rules. This to me is why cycles exist; if these people
would act in the overall best interest of the Country and not
the selfish interest of the individual voter groups I believe
that we could lessen the extent of the Depression when all the
"illusionary magic" has failed to produce an outcome
that never had a chance of success in the first place.
The only question I have, when it is all said and done, will
be the fate of the rest of the world. Will the financial system
in China fail? Will the rest of the world be able to avoid the
tough times that face the United States? I believe the rest of
the world has a chance to avoid the pitfalls that await the U.S.
economy and if this is the case then there will be some very
interesting opportunities unfold as China and India enter the
21st Century. I want to sell these developing countries the raw
materials they need to develop; I do not trust them at this stage
of their development to invest in the belief they truly do want
to abandon their old Communistic ways. Yukos and Nevson can vouch
for the fact that things are not where they need to be for one
to truly have faith in the safety of one's capital overseas.
Besides I have plenty of companies that I really like without
the risk of a flashback, in China, Russia or any other country
to some very unsavory times.
Some of you at this point are thinking that we could have the
same thing here in the U.S.; we did before. Although I have read
that no one who possessed bullion was ever charged with a crime
for not giving it up. If our politicians tried to do this again
I believe they would be very surprised at the outcome. After
all, I am sure that some of you vote; besides this would be a
situation where we could finally get some really positive help
out of the legal field. Even they have it in them to do right
at times. I don't think any politician in this country would
have the guts to go after the nationalization of our mines. After
all, why would they nationalize when all they have to do is print
up a little more worthless paper and pay, what is perceived to
be, fair market making everyone concerned a happy camper. Why
risk votes when you can buy true wealth and votes with a little
more worthless paper.
Yeah, that funny little feeling just keeps poking away at me
and I thank my lucky stars it does.
My first article is about to be sent to those of you who have
signed up for my e-mail list, thank you for signing up and for
those of you who haven't; there is still room.
October 11, 2004
Mike Hoy
mhoy@neb.rr.com
321gold Inc
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