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Weeee…the Roller Coaster is Back!



August 10, 2011 – Comments (1)

Remember those exciting (or nauseating) days in the Fall of 2009: up 500 pts, down 500 pts in DIA, make up your bloody mind. It was unwise to look up your portfolio or IRA or 401K on your computer w/o an airsickness bag next to your keyboard. Well, those happy days are here again.

The name you are looking for is ‘Dramamine’.


Just a couple of days ago, 10 year Treasury paper yielded 2.3%. Today, they closed at 2.1%. OK, this is kinda like trying to  get tickets to a Lady Gaga concert: on Monday the line stretched around the block, and today on my way home, I noticed that line now stretches around the block 3 times. This is obviously not the action of people who fear that Uncle Sam is spending too much or that the deficit will never go down, save for cutting the amount of Social Security checks that will go out in September.


Briefly today, gold hit $1800 per oz, and is sure to go above that in the next few days. Many, like me, have stated time and again that gold is in a bubble. It has no intrinsic value, but is an accurate emotional barometer of a certain class of investors. The minute psychological sentiment winds change direction, it will plummet like a cow leaping off of an oak tree trying to fly. Well, perhaps, but not on the visible horizon. Nevertheless, human emotion is feckless, so who knows what will really happen to GLD in the next few days.


I echo many Fool articles: ignore how much your investments have lost in the past week: for me, the loss can be measured in the double digit % points. I am not worried, but welcome the opportunity to buy stuff I have always wanted but could never afford, but are now on sale at prices I can afford. I got nosebleed a few months ago, and have been steadily accumulating cash. Now is the time to spend my horde, only problem is that I am starting to run out of cash, and I still have stuff on my shopping list. Sigh…


No one really knows. I draw your attention to the post-mortem analysis of Fall 2009: we just ain’t sure. Ditto for the last couple of days. However: think France, the second strongest country in the EU. Rumor is that it will suffer a downgrade, heralding the beginning of the end of the EU, but who really knows?

1 Comments – Post Your Own

#1) On August 10, 2011 at 10:44 PM, awallejr (33.06) wrote:

Well the concern is that we might actually be heading into another recession.  What bothered me the most was the downward revision of the GDP for the first quarter from 1.9 to .4.  To me that implies that the 1.3 in second quarter probably will be revised downward to negative.

I am simply hiding in yield.  I have been saying it will take years for the housing situation to settle out (despite Cramer's arrogant declaration that housing bottomed in 2010).  I said Bernanke's statement that interest rates will remain low for an extended period of time meant years.  And now that has been confirmed with a minimum of 2 years.

But when you start seeing the wild swings we are seeing during the summer months when most managers are off, it makes you worry what will happen come October.

People know me as a permabull, but when a permabull gets gets worried you can take it two ways, the contrarian point of view or the "uh oh" point of view.

Pick up the yielders and turn off the noise. Cost average into them, and stay away from momentum plays because you will more than likely get screwed on timing. 

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