10/31/10

Is this the way it was supposed to be?

The healthcare bill was supposed to cut costs. Really?

My healthcare insurance premium jumped 30%. My friends experienced the same increase.

Listening to all the rhetoric coming from Washington, the new bill was supposed to cut costs. Did I miss something?

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

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.

10/30/10

Major bear market signal

Did you see the cover of the last issue of Barron's?

BYE-BY, BEAR is the headline.

The cover shows a big bear close to falling in an abyss while a bull is enjoying the show.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

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.

Speaking announcement

YOU AND YOUR FRIENDS ARE INVITED
 
I will be speaking to the Akron-American Association of Individual Investors

Subject: Navigating the markets – The lessons of history
What did I learn in more than 30 years of managing money?
What are the simplest and most useful tools/ideas to manage your portfolio?

Place: Akron Downtown Public Library, 60 South High St., Akron, OH 44326, Ph: 330-643-9000

Date: November 2, 2010 (Tuesday)

Time: 6:30 pm – Free parking after 6:00 pm

10/29/10

Factoid

The stock market is now entering what has historically been the strongest half of the year. Investing in the S&P 500 from the last trading day in October (therefore referred to as the Halloween indicator) through the end of April accounted for the vast majority of S&P 500 gains since 1950. While there are some noteworthy periods during which the Halloween indicator didn’t produce (e.g. during the oil embargo of 1973-74, the dot-com bust of 2000-01, and the financial meltdown of 2007-2009), the overall out performance is compelling.

These statistics should be kept in mind before becoming too bearish. Of course, history does not repeat hitself exactly. It rhymes, however.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

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.

Busines cycle

Business cycle relationships.
  • Weak stock market is followed by ....
  • Weak economy, which  is followed by ...
  • Weak commodities, which are followed by ...
  • Lower profits, which are followed by ....
  • Lower interest rates and bond yields, which are followed by ......
  • Strong stock market, which is followed by ....
The lead-lags increase when the economy is stronger. They become shorter when the economy is weak. As it is now.
    These trends take place in any country, in any political system. Even in China. (My book Profiting in Bull or Bear Markets has been translated in Mandarin and will soon be launched in China).

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/28/10

    Technical patterns

    Gold patterns (click on the chart to enlarge it). Simple. Above average volume following a strong move on the upside predicts several weeks of consolidation.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    This is a big problem

    A quarterly poll by Challenger Gray & Christmas found that the “relocation rate” of American workers - or the percentage of job seekers who found a new position and moved to a different region as a result - hit a record low of 6.9 per cent in the third quarter (the survey started in the 1980s).(Source: FT)

    People do not leave their homes because they cannot sell them. Jobs go unfilled. Bad for the economy. And home prices are declining, making things worse.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    Interesting reading

    GMO-Quarterly Letter is always interesting Reading. Jeremy Grantham is a solid thinker and tackles the issue of the role of the Fed with brilliance. Just click here to red the whole letter.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/26/10

    If they were so good....

    Source FT. New research [from BIS] suggests - perhaps unintentionally - that leverage ratios are a poor indicator of impending severe bank stress or failure, casting doubt on the heavy reliance placed upon them in stress tests and efforts to make the banking system safe.

    ... how come we keep having so many problems?

    They keep making new studies, new research lead by the best minds. Yet we are drowning in problems.

    I am baffled, to say the least.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    Thought of the day

     
    I do not remember having ever seen a sharp and prolongued decline in stocks with the Fed in an easing mode.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/25/10

    About home prices

    10.7 month supply of unsold homes and rising inventories equals lower prices (click on the chart to enlarge it).

    Lower home prices equals low inflation.

    Low inflation equals interesting strategy in bonds. Remember....your returns should be risk adjusted.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/24/10

    For your info

    Bullish and bearish views. For more just click here

    And now this one.

    Wayne Whaley of futures firm Witter & Lester, who studies historical market tendencies almost daily, last week checked all the times since 1950 when the S&P 500 was up at least 10% over 35 trading days without at least a 2% pullback, like the current rally. The forward returns from the prior instances were in line with average long-term annual performance, 8.7%, and only once in 22 times was the market down a month later.

    What to do? They seem all so convincing.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/23/10

    A personal invitation

    YOU AND YOUR FRIENDS ARE INVITED
    The event is free of charge

    I will be speaking to the Akron-American Association of Individual Investors

    Subject: Navigating the markets – The lessons of history
    What did I learn in more than 30 years of managing money?
    What are the simplest and most useful tools/ideas to manage your portfolio?

    Place: Akron Downtown Public Library, 60 South High St., Akron, OH 44326, Ph: 330-643-9000

    Date: November 2, 2010 (Tuesday)

    Time: 6:30 pm – Free parking after 6:00 pm

    Observations

    There are many differences between humans and animals. At least, we like to believe there are.

    After all, we create great monuments, paintings, buildings reflecting marvelous ingenuity, and exquisite music. Above all, we have creativity, the capability of conceiving and making new things. And if this is not enough, my friends tell me that what makes us really different is that we have a soul. Of course, no one has ever seen my soul, but they tell me I have one, and I have to believe them. My uncle once told me the soul is a poetic invention needed to convince us we are different.

    Every time I look at an animal, I never fail to be amazed how much they look like us. They have two eyes, two ears, a digestive system (input, output, and everything in between), a reproductive system, limbs for locomotion, and above all, a brain. Who knows, they may even believe they have a soul that makes them different from us.

    But there is more. I was fortunate to have a tall pine tree in front of the bedroom. In two out of three years a couple of blue jays decided that a branch of this pine was just fine to build their nest. And so they did after careful inspection of the surroundings and making sure the spot was protected from intruders.

    Every morning, as I changed to go to work, I looked at their activities. First, they built the nest. It was amazing how carefully they chose the material. Strong on the outside of the nest, softer as they moved toward the inside. Eventually the nest had to be approved by the female (does it ring a bell?). So, she went and pressed with her feet and body against the walls of the nest to make it fit her size. It took quite a long time.

    One day the female laid the eggs and for a few weeks the male was circling around the nest, very carefully, trying not to be followed. He brought the food to his companion. I was ready to go to work to do exactly the same thing.

    Eventually the young blue jays were born. The mother was absolutely obsessed with keeping them warm, constantly moving to achieve this purpose. In the meantime the male was going around getting food for the growing family.

    One day, the nest became too small for the mother and the two blue jays. It was time to move on. The mother, using her beak, pushed the two young blue jays out of the nest. They had to learn how to survive. Does it sound familiar?

    They screamed as they fell from branch to branch. Eventually they hit the ground. The risks were high. A cat could come along. Welcome to the jungle. But eventually they made it. One day I saw four blue jays fly away.

    They did in just a few weeks what humans achieve with their families in several years. The blue jays did it at a much faster pace, with less fanfare.

    I am amazed how the concepts of life, family, managing its growth, survival, role of male and female, mother and father, are exactly the same—in humans and animals. There are a few nuances, of course, but we like to believe they are important because they make us feel different from “animals”. Really?

    (This "Observations" appeared in the issue of 2/19/01 of The Peter Dag Portfolio).

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/21/10

    A personal invitation

    YOU AND YOUR FRIENDS ARE INVITED
    The event is free of charge

    I will be speaking to the Akron-American Association of Individual Investors

    Subject: Navigating the markets – The lessons of history
    What did I learn in more than 30 years of managing money?
    What are the simplest and most useful tools/ideas to manage your portfolio?

    Place: Akron Downtown Public Library, 60 South High St., Akron, OH 44326, Ph: 330-643-9000

    Date: November 2, 2010 (Tuesday)

    Time: 6:30 pm – Free parking after 6:00 pm

    Technical patterns

    The market is at an interesting juncture (click on the chart to enlarge it).

    The 1200 level for the S&P 500 seems a formidable hurdle.

    The good news is that if the S&P 500 breaks above this level, stocks could go much higher.

    Stay tuned.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/20/10

    Technical patterns

    Candlesticks provide some useful insights on what is happening to the market.

    This is an example of what I mean (click on the chart to enlarge it). What is that jumps at you when you look at this chart? Pay attention to the tops.

    What I notice is that when the market rises, you see large "white" sticks and very small "red" sticks.

    However, near the top you begin to see the opposite. Long and depressing "red" sticks and few "white" sticks.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/19/10

    Business cycle and asset prices

    Are bonds in a bubble?

    I like to answer questions like this one using trends of the business cycle.

    Interest rates, including corporate bond yields, decline when the economy slows down.

    Interest rates rise, including corporate bond yields, when the economy strengthens.

    The issue is not whether we are in a bubble or not. The issue is what is happening to the economy.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    An old pattern is alive and well

    An old pattern is alive and well.

    The market is sagging today. The excuse was reasonable -- China raising interest rates.

    Market down. Commodities, mirroring the market, down. LQD up. JNK down.

    This pattern may be trying to teach us something.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/18/10

    A bullish view

    "The average gain in the S&P 500 during the 12 months following the six Congressional change of control elections since 1950 (including two Presidential election years) equals 11% with minimum and maximum returns of -4% and 33%, respectively (see Exhibit 6). Historically, the S&P 500 has generated positive 12-month returns following all 15 mid-term elections since 1949. Returns ranged from 3% to 33% with an average of 18%."(Source: Goldman)

    There are a lot of reasons to be bearish and be bullish. Who is going to be right?

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    A bearish view

    "Using this algorithm without leverage in a long/short 100% equity strategy has generated a 25.67% annualized return since inception (January 2006) with a Sharpe ratio of 2.29 and a max monthly drawdown of -5.22% in one of the most challenging market environments ever. The risk component has only been at current levels (or higher) twice in the last 5 years. The first instance was September 24th, 2007 at S&P 1526. Just shy of the all-time high and prior to a multi-month decline of almost 20%. The second instance was January 5th, 2009 at S&P 890. We had rallied 11% off the October 2008 lows and we all know what happened next. The market took a nose dive down to the March 2009 lows for an epic two month collapse of 25%." (Source: Pragmatic Capitalism)

    There are plenty of bearish views around. This is another one.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/17/10

    Observations

    The relationship with a client is very unique. I just “fired” one. Let me tell you why.

    The most important forces acting on the broad equity market averages are real short-term interest rates and the trend of short-term interest rates and commodities.

    Stocks offer great returns following a decline in short-term rates. This is what happened after 1995 and after 2003. This is the time when investors make substantial profits. And we did (see bottom of page 3).

    Rising short-term rates, on the other hand, are deadly for market returns. Examples: 1994 and 2000. And now.

    Make no mistake about it. The easy money for this market cycle has been made when short-term rates were declining and were stable. Now is the time to think about “capital preservation” and keep the eyes on the ball so that we do not miss opportunities. This is exactly what I am trying to do for you.

    Some investors have a short-term view (a few months) and they expect miracles from a money manager. They switch advisors after a few months based on performance. They think they get rich quicker by doing so. I do not agree with this approach.

    Prospective clients, like the client I “fired,” should make every effort to understand the manager’s investment philosophy and background.

    The second important step is to become aware of the manager’s performance in down and in up markets. It provides important clues about his/her style. Performance over the long term is misleading because it hides the volatility of the portfolio.

    Does it sound logical? I think so. But some investors do not think so. They are too uptight and pragmatic in their beliefs. They do not recognize there are cycles in the equity markets. It is easy to manage the upside. It is more difficult to manage the downside.

    In July 1999 some clients left me because I turned too cautious. Then they called me because they lost 65% of their money in just six months. Clients should understand these crucial market dynamics.

    (This "Observations" appeared in the 4/24/06 of The Peter Dag Portfolio)

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/16/10

    Thought of the day

    No one really knows what happened, what is happening, why, and what to do about it. If they did, we would not be in this mess.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    About health

    Q: Doctor, I've heard that cardiovascular exercise can prolong life. Is this true?
    A: Your heart only good for so many beats, and that it... Don't waste on exercise. Everything wear out eventually. Speeding up heart not make you live longer; it like saying you extend life of car by driving faster. Want to live longer? Take nap.

    Q: Should I reduce my alcohol intake?
    A: No, not at all. Wine made from fruit. Brandy is distilled wine, that mean they take water out of fruity bit so you get even more of goodness that way. Beer also made of grain. Bottom up!

    Q: How can I calculate my body/fat ratio?
    A: Well, if you have body and you have fat, your ratio one to one. If you have two bodies, your ratio two to one, etc.

    Q: What are some of the advantages of participating in a regular exercise program?
    A: Can't think of single one, sorry. My philosophy is: No pain...good!

    Q: Aren't fried foods bad for you?
    A: YOU NOT LISTENING! Food are fried these day in vegetable oil. In fact, they permeated by it. How could getting more vegetable be bad for you?!?

    Q: Will sit-ups help prevent me from getting a little soft around the middle?
    A: Definitely not! When you exercise muscle, it get bigger. You should only be doing sit-up if you want bigger stomach.

    Q: Is chocolate bad for me?
    A: Are you crazy?!? HEL-LO-O!! Cocoa bean! Another vegetable! It best feel-good food around!

    Q: Is swimming good for your figure?
    A: If swimming good for your figure, explain whale to me..

    Q: Is getting in shape important for my lifestyle?
    A: Hey! 'Round' is shape!

    Well... I hope this has cleared up any misconceptions you may have had about food and diets.

    And remember:

    Life should NOT be a journey to the grave with the intention of arriving safely in an attractive and well-preserved body, but rather to skid in sideways - Chardonnay in one hand - chocolate in the other - body thoroughly used up, totally worn out and screaming "WOO-HOO, what a ride!!"

    AND.....

    For those of you who watch what you eat, here's the final word on nutrition and health. It's a relief to know the truth after all those conflicting nutritional studies.

    1. The Japanese eat very little fat and suffer fewer heart attacks than Americans.

    2. The Mexicans eat a lot of fat and suffer fewer heart attacks than Americans.

    3. The Chinese drink very little red wine and suffer fewer heart attacks than Americans.

    4. The Italians drink a lot of red wine and suffer fewer heart attacks than Americans..

    5. The Germans drink a lot of beer and eat lots of sausages and fats and suffer fewer heart attacks than Americans.

    CONCLUSION:

    Eat and drink what you like. Speaking English is apparently what kills you.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/15/10

    About our taxes

    The top-earning 5 percent of taxpayers (AGI over $159,619), however, still paid far more than the bottom 95 percent. The top 5 percent earned 34.7 percent of the nation's adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes.(Source: The Tax Foundation)

    Who is carrying the ball? If the ball gets too heavy people quit working or hide.

    I still believe the real issue is spending, not taxes.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    This is Bernanke's concern

    Inflation is sagging (click on the chart to enlarge it). Now Bernanke says he wants inflation.

    And so we go from one cycle to the next saying inflation is too high. Now inflation is too low.

    Can these macro numbers be controlled? Let's assume that the unemployed (9.6% of the labor force) do not have have money to pay for the goods being sold. They can survive only if prices decline. This is the main reason inflation is sinking. Can the Fed print "jobs"?

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    About tax receipts

    All stripes of the income spectrum earned markedly less during recessionary 2008 than they had during 2007, according to newly published income tax data from the IRS. As usual during a recession, incomes shrank by larger percentages at the top of the income spectrum where sources of business income dried up. The top-earning 1 percent of tax filers were the 1.4 million tax returns out of 140 million filed who earned at least $380,354. In 2008, their share of all income was 20.0 percent, down from 22.8 percent in 2007. Their share of total income taxes paid also shrank: they paid 38.0 percent of all income taxes collected in 2008, down from 40.4 percent in 2007.(Source: The Tax Foundation)

    Tax receipts as percent of GDP have been declining since 1998 (click on the chart to enlarge it). But we keep spending more. Don't you agree that something has to give?

    My sense is that we should be worrying about growth and generating wealth, Then we can tackle how to finance the grand social programs. But what do I know!

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/14/10

    About currencies

    It looks like the objective of the Fed is to print more money. They need to boost the economy, of course.

    The outcome is the continuation of the collapse of the dollar.

    I have never see a country getting out of its troubles by debasing its currency.

    Strong countries have a strong currency. Weak countries with poor economic prospect have a weak currency.

    This is the lesson of history. Make no mistake about it.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/13/10

    The pattern seems to continue

    Strong market, weak LQD, strong JNK, weak UUP.

    Interesting. Does it have a meaning over the long term?

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/11/10

    From Bloomberg

    To understand where the advocates of big government will take this country, look at the U.S. Postal Service.

    Start with the fact the Postal Service is a great jobs machine, employing 712,000 people at an average annual compensation, including wages and benefits, of $83,000. And those hefty pay checks are a great source of political contributions for Democrats. In 2010, almost 90 percent of the approximately $4 million contributed to campaigns by postal unions went to Democrats. Take a guess where much of the opposition to reform comes from.

    10/9/10

    Observations

    I am amazed by the scope and depth of the “empire” dominated by English speaking people. I am not thinking of military domination. What impresses me is the cultural domination. Let me explain.

    After traveling more than 24 hours by plane I found myself in a country (New Zealand) located at the other side of the globe with people that could have lived next door in the USA.

    They spoke the same language. They had the same courtesy and civil ethics. Their sense of order and cleanliness were pleasing. Customs and behavior were very predictable. I did not have any surprises whatsoever. Their libraries, food, restrooms. Driving on the left hand side is the ultimate cultural heritage.

    Australia. USA. Canada. You can make the case that there are other English speaking countries striving to adopt the same culture and institutions – India.

    The US is now the leading pole bearer of the English speaking empire. We are trying to take our institutions and sense of discipline to other countries. First Europe. Then Asia. Now the Middle East. Russia?

    But it will have to come to an end as previous secular empires did: the Roman and the Ottoman empires.

    They conquered new lands. They brought their superb culture and political and administrative institutions to the territories they captured. Wealth was quickly accumulated through trade. Now we call it “globalization” or “outsourcing.”

    Then, the “barbarians” start changing the rules of the game at the outskirt of the empire. Wealth does not flow to Rome or Washington or London or Constantinople as it used to. The European industrial revolution could not be adopted by the Ottomans because of lack of schools.

    Corruption in the capital increases. The advent of new ideas (such as Christianity for Rome) changes the focus of the conquest. The culture that made the empire survive and prosper becomes tarnished. People in other lands begin to do things better. Slowly the Empire loses its economic strength. Its reach cannot be maintained. And the new “barbarians” establish their cultures.

    (This "Observations" appeared in the issue of 3/13/06 of The Peter Dag Portfolio)

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/8/10

    Good news and bad news

    The bad news. Job creation is dismal in this recovery. Click on the chart to enlarge it.

    The good news. The Fed and the politicians will make sure they will be doing all they can to get the labor market going. And this means printing an inordinate amount of money. There is a good chance the markets are going to like it.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    Bad news

    News. Oct. 8 (Bloomberg) -- The BRIC countries are united in opposing U.S. efforts to weaken or eliminate mechanisms to control currency fluctuations, Russia’s Finance Ministry said.

    The BRIC countries “have agreed on a position that exchange rates aren’t themselves a problem,” Pankin said. “Rather they are a consequence of deeper processes, such as tendencies to save, to invest, of the investment climate.”

    This is bad news. We are trying to solve our problems by telling other countries what to do.

    A trade/currency war is bad news for the global economy. It eventually leads to protectionism and the freezing of internationl trade.

    Instead of solving old problems, the global leaders are creating new ones. What is going on is incredible. I should say scary.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    Off the cuff

    When I was involved in managing $1B of foreign currency exposure in a large company and teaching in an MBA program exchange rate dynamics, one concept was loud and clear.

    In class I had the students look at the main forces driving exchange rates for all the regions of the world. The outcome was that the strongest countries from an economic and financial point of view had the strongest currencies.

    The current debate about the Euro, the Dollar, and the Renminbi should not be about the strength of the Chinese currency. The debate should be about the reasons why the dollar is weak.

    I experienced this relationship when I was in Europe. The currencies of the Northern European countries were stronger relative to the Italian Lira. Why? Because those economies were stronger and people were wealthier than the Italians.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    A bearish view

    Goldman Sachs is bearish on the economy (click on the chart to enlarge it).

    The main idea is that orders are declining relative to inventories. Business, in this situation, is forced to cut production.

    The outcome is a decline in the ISM index. The implication is that the economy is likely to slow down in the coming months.

    And this is bad news for earnings.

    Will then the Fed implement QE2? It would be great news for stocks. Let's hope so. Everybody needs to make some money to feel better.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/7/10

    Sluggish job market

    Unemployment claims are still sitting at high levels (click on the chart to enlarge it).

    It is a sign the labor market is not strong. Is more easing on its way?

    I guess so if the economy cannot produce more jobs.

    It should be good news for the markets. Bad news for those seeking a job.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/6/10

    Questions

    News. Oct. 6 (Bloomberg) -- Stocks advanced, sending Asia’s benchmark index to a 26-month high, Japanese bond yields slid to a seven-year low, Treasuries rose and corporate bond risk fell to lowest level since May on speculation central banks will accelerate efforts to stimulate their economies.

    The global central banks are ready to flood the system with money. The markets are becoming confident and exuberant. Is another financial feast under way as in 2000 and 2007? Let's enjoy it as long as it lasts.

    But I think we also need to be vigilant. Falling asleep at the wheel thinking it is going to be smooth sailing may not be a good idea.

    Is there a black swan in sight?

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/5/10

    In case you missed it

    The difference between orders and inventories is another way of keeping track of the inventory cycle in manufacturing.

    The graph shows that this difference fell to levels in the past characterized slow economic growth at best (click on the graph to enlarge it).

    Analysts talk about a bond bubble. Maybe the bond market knows better. Yields decline when the economy is slowing down and inflation disappears.

    Food for thought.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    One way to be re-elected

    The market is soaring today. What a wonderful show. Like watching fireworks.

    As I said in previous posts, stocks like bad economic news. The Fed will have to keep printing money and the market loves money sloshing around. In spite of the consequences.

    We will pay later, of course. Meanwhile, let's enjoy and feel good. This is what is needed to be re-elected.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    Trends

    Up, up, and away!

    Silver and gold have been rising since 2008 in response to the aggressive action of Washington in keeping the economy from collapsing.

    They are still very strong. They may be responding, like other commodities, to the easy monetary policy of the Fed. After all, why not borrow at 0% and buy hard assets like commodities?

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/4/10

    Interesting pattern

    I follow closely all types of bond ETFs or bond mutual funds. A pattern is slowly and steadily becoming more evident.

    When the stock market is weak, as today, JNK declines. LQD, however, which represents higher grade bonds, rises.

    I find this pattern particularly interesting. Why? Well, if you believe stocks are going to decline your should sell JNK and buy LQD.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    10/3/10

    Slowdown in profits

    Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $47.5 billion in the second quarter, compared with an increase of $148.4 billion in the first quarter.

    A sharp slowdown in profits. Should we worry about it?

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    Food for thought

    You need to read this article by Bill Gross (click here). This is particularly good because it gets to the point ... quickly and effectively.

    My view is that it is becoming increasingly more important to "time" you investments and be uniquely selective and focused on which asset classes are used as investments. I believe the business cycle is the most important tool in the investors' arsenal, as discussed in detail in each issue of The Peter Dag Portfolio.

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.

    Enjoy!


    Great music. One of the best interpretations. Exciting!

    George

    10/2/10

    Global bull market in bonds

    Oct. 1 (Bloomberg) Emerging-market borrowers are on course to sell more bonds than ever this year after yields hit record lows and developing economies rebounded faster from the credit crisis than advanced nations.

    In case you missed it. Bond prices keep rising with great total returns when you include the compounding of the interest.

    Time to sell?

    George Dagnino, PhD
    Editor, The Peter Dag Portfolio. Since 1977
    Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

    To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

    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.