I have been preaching that for a while, nothing has really changed from when oil was 70-80 dollars a barrel. Once the oil bubble burst the rest of the commodities market will come crashing down imo.

The Saudis see the writing on the wall and know that if this continues it will eventually curb the world's appetite for oil which would greatly impact future earnings for years to come. They know that Once the wealthier nations commit to spending a great deal of money on alternatives there is no turning back.

Protect your own portfolio by making sure you know what your beta coefficient is. T bonds which are suppose to be safe, are now at risk IMO, because they are static and when you calculate the r* (real rate of risk), its dependant on the economy. Draw your own conclusion as to how our economy is doing. At the current rate, I suggest you buy a big shotgun because that’s what you’ll need to get commodities in order to survive.

I don’t think you should be afraid of the market, just be smart and maybe listen to Jim Cramer from “Mad Money.”
This is what I use for info : http://seekingalpha.com/tag/market-outlook

My opinion is "Stop watching the news and stop reading the newspaper". It's an election year. Media will always play the fear card and make as if the world is going in the tank. If you want to get wealthy, do everything the opposite of whatever the public is doing

It's a great buyers market! Best time to buy is when you can buy at a substantial discount. Money is in REAL ESTATE and under value stocks of good companies! I love this real estate market. Buy at .50 cents on the dollar, rehab and retail at .85-.90 cents on the dollar. Anyways, just my .02 cents. And no, I'm not Carlton Sheets! LOL

unless your @ wall street, then you need some time of media to inform you on stock performance. Hopefully, real estate is in everyones portfolio, but I'm sticking with the OP's original question.

I guess it all depends on your timeframe.

I think w Bernake devaluing the dollar as far as he has, inflation is upon us, no matter what anyone says.

With that being said, cash is a poor place to be right now.

Real Estate is falling, and still has more room to fall.. I would say stay out of RE for at least another year.. Let the credit crunch work itself out, and get the banks a little more eager to loan.

FOR ME, I own oil wells.. Short term I think this is the best place to be. I do think that $130 oil is high, but just last year $80 oil was unheard of. So, I think that the ptb are just trying to manipulate things to get us "happy" with $80-100/bbl oil. I think I'm the only guy smiling at the pumps these days, as I'm filling up my diesel truck.

I also own quite a bit of gold. It is the classic inflation hedge. Silver is a bit better IMO, but both are much better than dollars right now.

IMO the commodity bull has just begun, but, that doesn't mean throw caution to the wind.. just be aware of the current.

I saw this coming at the beginning of this year, and I'd moved about 30% of my stock investments into my development/contracting firm, it's a great buyers' market and I'm glad I was lucky enough to get 2 prime pieces below market value for condos projects. I'm not a day or short term trader, so whatever appears on papers are not that important to me, only thing matters is the realized gain/loss part. Gas prices and all daily needs though are killers, I might have to start riding a bicycle to job sites just to save a few pennies.

It's not as bad as some of you make it out to be. Ever hear the term "buy when everyone's selling and sell when everyone's buying." Think about it.

Roland,
I can't comment on blogs. But give me a call, I'll tell you what I think is going on. Z

I'm in the commercial RE biz in TX and there's a bucketload of money to be made in this market...but not in stocks. The stock market is so heavily influenced by the perception of future growth that emotion has completely overtaken fact. Since I'm not a psychologist, I'll stick to investing in vehicles where the value of my investment is established by clear market factors, not emotion. Although we certainly have our issues in the RE biz (i.e. turmoil in capital markets, CMBS, etc.) at least I can pretty accurately predict a property's value growth over time and develop decent exit strategies.

I wise man told me that there's money to be made if the market's going up, or going down, just as long as it's not flat.

Firstly, forget that the reason oil is up here is because of speculators. Sure they have not helped but the physical demand is far higher than the speculative contracts are.

Of the new Oil finds most are sour and costly to refine, also refining capacity is really straetched and new capacity takes ages to come on line. That said OPEC say they are maxed out... who knows really, besides they all cheat and at $130 one would expect allot more would be cheating now than at $80.

So if anything I would say supply is streched and demand is rising fast.

How can the stock market stay bouyant when in effect we are probably going through the second biggest energy crisis and the biggest credit crises combined? Its mind boggling....

You taking out the lube of the economies engine (credit) and you are adding fuel to this fire with rising commod prices... Right and companies are going to be enjoying this environment and making huge dough? Gimme a break! Its like leaning out the mixture with no oil in the crankcase.

So to repeat what has been said before in somewhat more uncertain terms... we are all ferked. 10k / 1k Dow / S&P by year end is my call, with more to come next year, and the recovery willl be dismally protracted.

I too am steering away from mod spending, as who knows my bank could axe my butt tomorrow, as they have done to may of my colleagues of late.

If you beleive in inflation/stagflation (which I do) then the right position should be cash, T-Bills, and gold/silver, a house (pain in full), a business that generates net +income, and no debt. I would also suggest to read Richard Russell's (Dow Theory Letters) who publishes his commentary on a daily basis. He provides a great insight into the market dynamics.

In light of all this pessimism the markets are not falling apart and holding above Jan 08 lows, especially non-confirmation in the Dow Jones Indistrials vs Transports. This non-confirmation can be very bullish, unless of course Transports and Indistrials both beat the Jan 08 lows.

Albert.

One big difference I have noted is bond guys think equities should tank and equity guys think they will go up... nothing realy scientific just anecdotal.

GS are calling for 1500 S&P by year end..... they been on the money of late in more ways than one.

Seems to me that all the above opinions have some validity.
But I've been in the biz for 20 years and my gut opinion is that yes we do have problems but when everybody is talking about it, it usually means we are near a bottom.
I discount what any institution/analyst/talking heads and my colleagues are saying, their track record are abysmal at best and they are paid to scare people to move their portfolios (called generating a commission).

I would challenge the notion that all hell is going to break loose. Are there fundamental problems? Yes, is it global? Yes, are we all going to be selling apples and selling pencils on the streets, and jumping out of windows? I hope not.

I usually take the contrarian view and have been successful, might have been early or slightly late to the game but nevertheless going against the grain.

Pareto principle: when 80% of the people are saying one thing the other 20% is doing the opposite. Note that the 20% are silent and making money. Who do you think benefits from this doomsday scenario? The silent minority.

This is not the first or the last crisis the world has experienced, but each and every time we have all survived, and some have made fortunes.

Happy hunting for values and rely on your common sense.

IMHO.

+1

Very nice summary. The ole "blood on the street mentality". I just wish we would get to 1225-1270 so I can get back in the market. I have been waiting for the VIX to hit 30+ to confirm a bottom similar to past bottoms. Right now, we are not there. Just wating patiently.

I agree with most of what you say... although I think this time round the crisis may just have some legs... although I really, really hope you are right!

For me having worked through the '87, '98, '01 crashes this is by far the most protracted, and the toughest to remedy. '87 may have been much more extreme one off event, but traction was found reasonably quickly.

Now its tough, how do you convince people its ok to lend money? The longer they don't the worse the problem gets and so on.... No one can say when this credit crisis will end... and no one seems to have a solution, because authorities just dont have the tools to kick start this.

I agree that the current problems we have are bad, but so were all the other problems in the past. Just go back to previous economic crisis the world has experienced and you'll notice that same emotional reaction as today.

Will things get worse? probably, but the fact that this thread exists tells me we are moving towards a solution.

Emotional reaction to widespread panic has always been the downfall of rational investment strategies which blinds most to the positives that exist. You can't have good without bad, things are bad now, means look for the silver lining.

Blood in the street saying is so appropriate in today's irrational fear that we are all doomed.
We will all survive, it's just that some will have seen the light at the end of the tunnel while others see a freight train approaching.

ITA

******' electronic commodities exchanges and brokers with $100k minimums, and now every Joe Schmo with a savings account and a wall street journal is suddenly a goddamned oil speculator...

Drive prices down all at once, and it would definitely teach them a lesson.

heres my 2 cents as i did take a profession as a financial professiona/IA



the person who mentioned international bonds was dead on.

keep your money away from the stock market. anything stocks/bonds/MFs are going to tank.

yes it will get a lot worse before getting better. the general consensus from what ive heard is that real estate will continue to decline until the end of about 2009. then we will experience a level off sometime into 2010, and possibly 2011.

im sure you guys are aware they are rewriting the tax laws in 2010, with a couple key points being addressed.

1. the amt of mortg. interest that you can write off
2. the possible taxation of cash value life insurance and them being seen as investments instead of insurance.

any other questions/comments u guys can feel free to PM me as well.
im all for a wednesday morning discussion as opposed to the morning paper.

I'll tell you what really pisses me off is AMT. That is a hidden tax for the upper middle class that was supposed to be scaled back due to it's unfair consequences. Unfortunately the Govt. cannot do away with their windfall tax collections on AMT. WTF....

Anyways.........
Are there any international bonds you have in mind. If interest rates are presumably on the rise, wouldn't bond prices go down in value? If you actuall have a symbol for some, I can research them on my own. Thanks for your assistance.

I am still holding out at this time until I see another 10% correction or SP 500 1200 or SPY @ 120. In that case, i would have missed a full 20% correction in the current year with not a whole lot of risk on the downside.