Financial Sense Blog

The CIA produces the World Fact Book. There is a lot of interesting information to look at. The spooks have been updating the info for 2010. Some of the year over year comparisons are interesting. In its intro to the Global Economy they had the following to say. I think they summed things up pretty well.

Tracking which commodities have performed the best over the past decade and why?

Earnings releases for the options trader do not force us to take a position in which we must correctly predict the direction of price action stemming from the earnings release. By exploiting the typical changes in option pricing that reliably and reproducibly occur as earnings approach, it is possible to establish a broad potential range of profitability that extends for a considerable distance both above and below the current price of the underlying.

The discussion in the markets were the Joe DiMaggio like rise in stock prices – day in day out, the market persistently rose or suffered merely a modest decline. After Joltin’ Joe’s streak ended, he went on another 16 game hitting streak.

Do not expect all recommendations to be profitable. No system can achieve that lofty goal. Our goal is simply to state whether conditions for a metal are favorable or not. Buy signals are issued when appropriate.

The “Beast” about which we and a few others have been Warning for months has awakened in the Economy and Financial Markets.

On January 18th and 19th, the top officials of the two most powerful nations on Earth are to meet in matters of far reaching significance. There will be not one but two dinners. One is to be a grand dinner of state with all of the military and business leaders of both sides in attendance. The other is to be an “intimate” dinner. Oh, to be a fly on the wall of that private meeting.

From all accounts it appears that the world is in the early stages of a major leg up in food prices. The major macroeconomic trend will likely drive economic policy and the investment outlook for years to come.

We don’t normally discuss our views on the stock market except in relative terms vis-a-vis bonds or commodities, but in this edition we take a direct look and conclude that the stock market is now not only fundamentally overvalued but at risk of a major correction. In all probability, should that occur, commodity prices are likely to correct in tandem, yet also outperform on the downside. Why?

Precious Metal bulls will tell you to buy the dips. This means, wait for the price to temporarily deflate, and then purchase your position. It is a way to maximize dollars for gold and silver purchased while maintaining a steady buying program in that metal. The same concept could be used for any fund or stock, as well.