Walking the Walk
Research for Online Investors

by John Dalt

11/13/09

The rally returns today as the dollar tanks. Our present ‘leaders’ in Washington will have to learn the difference between action and a good speech. What do you expect? Professional politicians have never taken action on anything except polls and fund raising. It is the difference in “Walking the Walk” and being the “Teleprompter in Chief.” Wall Street, world governments, commodity traders, bankers and the knowledgeable public know talking about lowering the deficit without concrete fiscal restraint is just hot air. When was the last time we saw fiscal restraint in Washington?

Subscriber D.H. sent us his best with, “Greetings from Dallas.  We had dinner last night with the President and Laura.  They are truly class acts!”

I thanked D.H. for ‘inviting’ me, and commented, “Compared to Oh! Bama who gave Gordon Brown a basket of DVD’s?  I did better than that when I was in grade school.”  The anointed one has made the U.S. a laughing stock for electing an amateur, and socialist beside.  In thinking about it, I am not sure he is an amateur at being a socialist, just leading a country, keeping peace, understanding the constitution, etc.

On the bright side, maybe the new college career choice will be community organizer rather than attorney.  Oh, he is both.  At least he is not practicing.

I may not have agreed with G.W.B. #43 on everything, but he never embarrassed me, or our country.  He took action then gave a speech, rather than giving speech after speech and no action.  One of the things I learned as an elected ‘official’ was to never explain your actions.  Your supporters understand what you are doing, your enemies just use the explanation to attack you.

43 quit playing golf after he sent men and women into harms way.  43 never made a photo op out of caskets returning to the U.S.  43 never used the White House to attack his detractors, even when Harry Reid and Nancy Pelosi ranted against him daily.  43 never apologized for America.  43 understood and lived American Exceptionalism.  I agree, A CLASS ACT, that "Walked the Walk."

“Thanks for the reminder to be grateful to our veterans…San Diego real estate is rebounding on the lower level homes. I have been an appraiser for 10 years and selling real estate for 4 years. It’s very frustrating for buyers because the demand is so high for lower end properties and multiple offers are on every desirable property. Banks under list the property (why I don’t know) and generate a huge amount of offers.  Upper end homes are very hard to sell because of harder financing and higher end jobs for people are at a premium. I wouldn’t give up on buying real estate as an investor as long as you do the research and you can make the numbers work from the rental income and get a FIXED loan. The big issue will always be interest rates….seems to be that way with the stocks and commodities too…How does one invest in pre-market hours?” ---SwingTrader Subscriber, S.C.

Thanks for writing S.C.  I hope you and others consider doing business with http://www.worcesterwreath.com/ that we highlighted earlier in the week.  Morrill Worcester donates wreaths every year for Arlington National Cemetery.  I enjoy the fruits of our veterans year round, so try to be appreciative at all times.

It is good to hear your local real estate market is firming.  Stronger pricing on lower priced homes should work its way up the food chain.  Higher interest rates in the future will hurt, as you caution to get a FIXED loan.  I wonder if the McMansions will regain market share going forward.  Higher taxes, higher energy prices, and the experience of being locked into a declining asset may kill future desire for bigger and better.

Pre-market trading is accessible through your online account.  When entering your order, you should be able to enter “pre-market”.  On Scottrade, this option is only available outside the normal market hours. The same with “After Hours” trading.  I would caution that the market is not ‘liquid’ outside the normal market hours.  Prices will fluctuate wildly and immediately to any news.  Hence, the comments last week about BNI stock zooming immediately to $97 on the buy-out announcement for BRK.  If you were short, you were toast.  The pricing is similar to bulletin board stocks, with wide spreads, so be careful.

The talking heads have done their best to “talk the market down.”  It has been hard to be positive with the daily chants about the need for a pullback.  Everyone seems to question the steepness of the rally since March, and whether it can continue.  Chart of the Day give us a graphic view that should warm any bull’s heart.  The Dow made another record high Wednesday as it moved further above the 10,000 level. To provide some perspective to the current Dow rally that began back in March, all major market rallies of the last 109 years are plotted on today's chart. Each dot represents a major stock market rally as measured by the Dow. The Dow has begun a major rally 27 times over the past 109 years, which equates to an average of one rally every four years. Also, most major rallies (73%) resulted in a gain of between 30% and 150% (29.8% to 150.5% to be exact) and lasted between 200 and 800 trading days (9.5 months to 3.2 years) -- highlighted in today's chart with a light blue shaded box. As it stands right now, the current Dow rally (hollow blue dot labeled you are here) would be classified as both short in duration and below average in magnitude.

So there you have it, if history repeats itself,
we need to go higher and longer!

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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