Thoughts on the market

Every once and a while I like to post thoughts on the market from other people. This is from an email I received today from Alan Salzman who runs a little newsletter for dividend oriented investors. Not my thing but he has occasional words of wisdom. Here are some.


Sometimes I just need to put some random thoughts out there for you folks to either consider or call me crazy or just laugh…or cry, but whatever.

Since the markets have chosen that red is its favorite color there are ways to make money which I dont recommend but some folks love to gamble every now and then. There are a few stocks that have gotten whacked that simply should not have and could create some little trading possibilities…its high risk so dont do it. If you have a high risk tolerance then feel free to lose money but if I were you I would just sit around and let everyone else try to time the markets. Its fun to watch actually, but… even the best traders fail miserably.

Russia for all intents and purposes is out of business. They have no money, cannot pay bills and they have decided to raise interest rates when nobody can afford zero anyway…the ruble is worthless. No there are no buy the dip opportunities that I would touch with a ten ft pole. The country cannot last on low oil prices, neither can Brazil or Venezuela…I wouldn’t trade those areas as they are toxic…for some well heeled people who can afford to lose millions before making billions, well let them all have their fun.

Guess what, remember the strategic oil reserves that the us has? It has 700 million barrels of oil just itching to further disrupt the market if sold…the US cost is about 30.00 per barrel and the value has been cut in half in about a month. I wonder what would happen if we sold it all to China at lets say 60.00 bucks a barrel? Do we need the SOR anymore anyway? We are producing more oil than we can eat right now…nah, at some point things will go back to the way it was, so we better keep the oil ourselves…

Hey, yesterday XOM went UP when everything went down…hmmmm, maybe a bottom has been reached? I have no idea and nobody else does either…which is why I am sitting around and playing poppit on pogo rather than taking any action with stocks right now.

The one thing I want to stress is that while the markets correct and oil is dropping, the Fed is watching also…lots of chatter about if and when they will stop ZIRP and begin raising rates. Well if oil keeps dropping and causes other products to drop prices isnt that DEFLATIONARY? The FED does not want that and it might mean that they will NOT raise rates…just a thought.

It is a very weird stock market we are in, since lower oil prices actually helps consumers and companies yet the markets see it as awful for now. They will wake up when the GDP expands, but by then oil prices will be headed back up and everyone will happily complain about 4.00 gasoline again I suppose.

Have a safe day out there and there are plenty of movies to see instead of watching CNBC.