7/2/15

The problem with our world

 

 What are they doing to our world? Nations fail because of concentration of power. It is difficult to quantify this concept. So, let’s look at the results - how fast an economy is growing and its pace of wealth creation (productivity growth). A subpar pace and poverty is an indication the political system has become too pervasive. Too concentrated. Too obsessive. Too regulated.

I have always been negative about the outlook for China. Why? Because it is a dictatorship - like the USSR, Cuba, Venezuela, and many other struggling countries.

If we are disappointed about the growth of our economy it may very well be the outcome of excessive concentration of power in the hands of a few economic players - whatever the reasons may be - rightly or wrongly. The markets and the sluggish economy are saying it is happening. People’s discontent confirms it.

The same has been taking place in Europe. I have been writing about it for many years. The EU idea is not working because of concentration of power in the hands of a few unelected and untaxed bureaucrats who have been building sumptuous offices in Brussels and Frankfurt while the populace is struggling in poverty.

The EU idea is wrong. You cannot put together countries with very different cultures, languages, productivity differentials. The country with the highest productivity (Germany) is going to gobble up the others reducing them to poverty because investments flow toward the country with more wealth-generation capabilities.

The same is happening in the US. But in a much smaller scale than in Europe. Productivity differentials among our states create invisible local dollars. For instance, Ohio’s main employers are government and healthcare. When I go to Greenwich, CT everything is more expensive because the Ohio Dollar is much weaker than the Connecticut Dollar. Ohio is producing less wealth than Connecticut. The OH$ is worth less than the CT$.

The point is the markets always win. Concentration of power reduces productivity growth (wealth generation). And productivity differentials create imbalances as in Europe, thus producing poverty and financial volatility.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets


Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

Stocks at a critical juncture

 

The market is at a critical juncture from a technical viewpoint.

Note how the 125dma (blue line) has identified a solid uptrend for the market and is now playing the role of a crucial support.

SPY bounced above the 125dma every time it touched it in the past 2 years with only one exception - October 2014. Watch out below if stocks break below the 125dma. They could decline to or below the 200dma (red line).

This is the reason stocks are a critical juncture.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets


Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

6/28/15

Bond futures soaring...right now

 

The uncertainties created by the European issues with Greece are sending yields much lower and bond prices soaring.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets


Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

S&P 500 futures sink...right now

 

The S&P 500 futures are sinking right now in response to the European crisis.

The world is paying the price for a bad idea - the Euro.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets


Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

EURO COLLAPSING...RIGHT NOW

 

The Euro dropped substantially the past few minutes as markets opened (Sunday).

It declined from 1.12 to 1.08 and keeps sinking. The financial market do not like what they see ahead for Europe and a disgraced currency.

The European experiment is creating poverty. There is no question about it. I have been writing about it for many many years. Germany is the only country benefitting from the Euro.

The southern European countries are paying the price. It is not Germany's fault. The issue is that in a large economic area you cannot put together high productivity wealth producing countries and other countries with low productivity.

The high productivity countries will destroy the low productivity countries because capital is bound to go where wealth is produced and will escape the low productivity countries.

This is exactly what has been happening. This is the reason I have been predicting an unfortunate outcome for the EU. It is sad to see so many people suffering because of a few bureaucrats' bad idea.

Will the markets win as they did in the past? Time will tell.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets


Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

6/27/15

Market seasonality: what's ahead for the market in July



The percent of months in which the S&P 500 closed higher than it opened in the last 15 years (see above chart)?

40% in June.
50% in July
64% in August
57% in September
71% in October

Bottom line? It looks like we are facing an uncertain seasonal period. Stay tuned.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets


Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

Market breadth points to correction

 


This chart is really worrisome. Will the market ignore it?

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets


Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

6/19/15

Investments to avoid



The business cycle has two major phases:
  1. stronger than average growth and
  2. weaker than average growth.
Commodities - as I have been writing ad nauseam - do not perform well in a weaker than average economy.

Caterpillar sales record proves my point (see above chart). Commodity-sensitive asset classes and investments do not perform well in a weak economy.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets


Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

6/16/15

Is the market overvalued?

 

According to this indicator the market is grossly overvalued. Note how it moved much higher than the 2000 and 2008 market bottom.

It looks like we are in uncharted territory. Time to be cautious?

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets


Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

6/13/15

A strong bullish sign


What do they know?

Amateur investors are emotional in their asset allocation.

When the market is strong and Wall Street is enthusiastic about the market, they start allocating more and more cash to equities.

They tend to become conservative when the market fails to appreciate or enters a boring period like the present one.

Fear comes into play and investors start allocating more an more of their capital to cash. Unfortunately they are always too late to the party.

This is exactly what is happening now. Investors are afraid and are moving they investments into cash. This is a great signal. It may be telling us we are closer to the time to buy stocks.

Why? Because as shown in the above chart, investors are always wrong at major turning points.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.


Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period,  and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.