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War On Your Dollar – Bernanke’s September Surprise – The Mangru Report on Fox Business – Episode 20 October 7, 2010

Posted by Admin in Market Commentary, Panel Discussion.
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Federal Reserve Chairman Ben Bernanke recently announced that the recovery was not as strong as originally thought, the U.S. did not have enough inflation, and that the Fed would increase it’s debt purchases & inject more money into the system.

Watch Dan Mangru, John Browne (Euro-Pacific Capital), Anthony Pulieri (United Bullion Group), and Michael Solomon (Author, Where Did My America Go?) discuss how the dollar is being devalued, how Bernanke has created the perfect storm for gold, why China is not buying U.S. debt, and whether there is too much hype and excitement in the gold market.

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Buy and Hold Still Holds – John Browne Commentary September 5, 2010

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Buy and Hold Still Holds
By:John Browne
Thursday, September 2, 2010

As Americans have justifiably lost faith in the stock market, the classic buy-and-hold investment strategy has fallen from favor. The problem is that retail investors are wrongly equating the performance of stocks as a class with the trajectory of American stocks in particular. Fortunately, buy-and-hold still works in many parts of the world. If you are an American, just don’t try it at home.

The US market is in sorry shape. The Dow Jones Industrial Average and the S&P 500 are presently no higher than they were 12 years ago. If you factor in 12 years worth of inflation, then these results are abysmal. Although American stocks have gone nowhere, extreme economic stress has nevertheless created huge swings of volatility. During the past decade, US stocks have surged 50%, plunged by similar amounts, and then risen and fallen again.

To be a successful player in such a volatile, directionless market requires the kind of knowledge and vigilance that only the best financial professionals possess. The key to trading is the flexibility to make very short-term movements in and out of stocks and sectors, combined with rigorous sell discipline. Oftentimes it means placing a short-term bet on a company and sector even if one believes the move makes no long-term sense. As these capacities are not common among retail investors, who can blame them for heading to the exits?

While attention is often showered on the traders who find success with short-term momentum plays, less attention is paid to fundamental economic growth, which is, after all, the main reason that rank-and-file investors profit from the market. A growing economy lifts all boats, and brings buy-and-hold investors along for the ride.

In recent times, the long-term trend of a massive shift in growth from American and European developed economies to emerging economies, especially to China, has benefitted greatly the buy-and-hold strategies of investors following that mega-trend. I believe that this trend will likely continue over the long-term. I also believe that emerging-market stocks will not be as vulnerable to the next downturn in US stocks as they were in 2008.

Recent conclusions from a number of high-profile research organizations support this forecast. According to IMF estimates, developing economies’ debt will average about 40 percent of their gross domestic product this year, compared with 107 percent in advanced economies. The IMF believes that this comparatively lower debt burden will help the developing economies grow 6.4 percent as a group in 2011, greatly surpassing the 2.4 percent expansion expected in the developed world.

According to Morgan Stanley, emerging-market companies are finding better opportunities to reinvest their earnings, producing a return on equity of 14.8 percent, compared with 10.2 percent in the developed world. *

However, despite this tremendous growth and profitability, shares in the emerging markets remain at attractive valuations relative to the mature economies. In fact, data compiled by Bloomberg shows that for the past decade, except for the 10-month period ending in May 2008 (right before the crisis began), emerging-market shares consistently traded at lower earnings multiples than developed markets. The MSCI Emerging Markets Index has traded at an average discount of about 30 percent to the MSCI World Index during the past 10 years, the data show.  *

Buy-and-hold remains a viable strategy for foreign stock investing at current valuations. The popular alternative, keeping savings in US bank accounts and bonds, is an increasingly risky strategy, in my opinion. While a natural recession would benefit savers and bondholders, as decreasing prices make a penny saved into a penny earned, the US government is determined to continue intervening in the market.

Washington, whether it is controlled by Democrats or Republicans, is unlikely to ever suffer the political consequences of stepping back in the face of recession. So, even while some form of austerity is sorely needed, it is extremely unlikely to be enacted.

Instead, more useless economic stimulus is likely to materialize. While huge infusions of government spending will create the short-term illusion of recovery, the result most likely will be greatly increased taxes, massive debt increases, a further lurch from private-sector wealth creation toward public consumption – and, finally, debasement of the US dollar.

So, retail investors sitting in US bonds and bank accounts will ultimately pay a steep price through inflation. The answer, it seems, is not to abandon stocks, but rather US stocks. Not to abandon buy-and-hold, but to adopt buy-and-hold-elsewhere. And if you were never a stock buyer, there’s always the security of physical precious metals.

For the full text of the article CLICK HERE NOW.

Casey Research CEO Olivier Garret One-On-One with Dan Mangru – The Mangru Report – Episode 11 July 14, 2010

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As the financial reform bill moves closer to reality, Casey Research CEO Olivier Garret warned the viewers of The Mangru Report how the big banks will use the financial reform bill to consolidate their power.  Although though the financial reform bill gets derivatives traded on an exchange, Garret warns that there are too many loopholes in the bill and it just adds to government bureaucracy.  Garret also shares with Dan Mangru his thoughts on E.U. austerity, and the gold trade.

Anthony Pulieri: The Bears Running Wild for a Decade in Stocks and the Bulls Charge Forward in Gold…. June 23, 2010

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Exclusive Commentary By Anthony Pulieri

Chief Investment Adviser

Joseph Glenn Commodities

I look at the U. S. stock market and see nothing but the destruction of wealth over the last decade and it sickens me to continue to see an entire society all in and over committed into stocks.  Are you kidding me?

We have just seen The Lost Decade.  The U.S. economy has expanded at a healthy clip for most of the last 70 years, but by a wide range of measures, it stagnated in the first decade of the new millennium. Job growth was essentially zero, as modest job creation from 2003 to 2007 wasn’t enough to make up for two recessions in the decade. Rises in the nation’s economic output, as measured by gross domestic product, was weak.  Household net worth, when adjusted for inflation, fell as stock prices stagnated.  Home prices declined in the second half of the decade and consumer debt skyrocketed.

I continue to see nothing but absolute market volatility and pressure downward.   Whether it was the dot.com bubble bursting, or the massive real estate mortgage foreclosure crisis, all the way to the 2008 market debacle and destruction of wealth, the last 10 years have been nothing but turmoil for the average American.  When it comes to investing, the last 10 years have been nothing but a short term traders market.  The buy and hold strategy that had succeeded for so long is no longer a recipe for success.

I had discussed that this market came way too far way too fast at the peak of 11200 on the Dow and the S&P move to 1200 was not justified.  This was just a short term bear market rally and here we are about to break the important 1040 mark.   If we see this break through a test of 950 could approach very quickly. I am still sticking with my belief of 9000 on the Dow and possibly even lower at 8400 in the short term.  Technically speaking the market seems to be breaking down.  It is having major trouble breaking through the almighty 200 day moving average.  If it is able to do so we could see a short term bounce, but if not the market will experience an extreme sell off and it will happen at lightning speed.

The European contagion has been growing and will continue to spread at a steady pace.  The entire continent of Europe is in major long term trouble and the Euro continues to get crushed. We have seen a dead cat bounce off the lows for the Euro but it is absolutely a flawed currency and the down trend will continue over the long term.  I do not see how this can change in the short term and what this has done is create a lack of confidence globally throughout Europe and America. The stock market trades purely off of confidence and there is none out there.  Can you blame anyone for not having confidence after all the years of credit expansion, easy money and free spending? What do you expect?  We would be able continue to spend at a pace not even imaginable just 20 years back and succeed?  Will the policies ever get reeled in? We have chosen to inflate our way out of it and the Federal Reserve is left with no answer except to print more dollars. The strategy to inflate our way out of the deep recession we are currently in will culminate with the ultimate demise of the U.S. Treasury market and the U.S. dollar.  Large investment flows have been flooding into the U.S. dollar but we have seen that trend reverse this week. This rally is over and we will see the U.S. dollar get demolished in the midterm and long term.  Rick Santelli, said it best, “it is the tallest midget in the room”.

I turn my focus and investors to Gold.   This market is an absolute bull market and has been for 10 years now.  I believe the talk of a bubble is absolutely false.  If you look back to all of the bubbles that have popped what you see is extreme volatility when the top is hit.  We have yet to see any volatility in gold and it has done nothing but built an impressive base technically for 10 years with higher highs and higher lows alongside heavy volume.  A short term move to the downside is possible to 1170 but there aren’t any sellers on any level in gold.  Whenever it dips 10-15 dollars we see more buying right away. So until we break the 5 month uptrend I am no way selling my gold.  I am a long term investor though and always have been.  If we are able to retest and break 1250 I believe 1320 will be hit very quickly.  Ultimately 1500 will be broken through by year end.  Over the long term, 12-24 month forecast, 2000 per oz gold will be met with ease.  Central Banks globally have switched from being net sellers of gold to net buyers.  This is a huge change historically and very bullish.  The global production cannot keep up with demand.  The South African Rand Refinery has seen an increase of 50% in coin demand last month alone alongside an 86 year low in production, yet one more example of the bullish nature of Gold.

I stand firm in my belief that Gold will continue to trend higher because of the lack of faith in fiat currencies. The Dollar has been going down for the last decade and has gone down by about 30% since its high. The euro is in a major down trend due to the European contagion spreading and has just begun.  Gold is the currency of kings and has weathered every single economic storm known to man.  It has survived every major war and will always be a store of value to protect your wealth.  If you look back in history you will see that every paper currency in the history of mankind has ultimately devalued to nothing and gone to zero.   Protect your wealth and buy Gold.  The enormous web of uncertainty permeating throughout the world will continue to drive Gold higher and ultimately lead to tremendous gains in your portfolio.

Anthony Pulieri is the Chief Investment Adviser to Joseph Glenn Commodities.  For more information please CLICK HERE NOW.