Thursday, November 6, 2008


We are printing money right and left and now we are going to bailout the auto industry. We are throwing our future away and are turning our head to the prospect of inflation. I can't believe that we are destroying our dollar as we are. I have worked my portfolio over and am adding to natural gas and the companies in that space. My FLR reported blowout earnings and record backlog for the quarter and the stock is up a measly 9% in the after hours. Global demand for a company like FLR has not fallen as most would have you believe. Oil and Gas are coming back and inflation is going to go wild. Gold at these levels is so cheap if you have a long term horizon. Read my post from last night for my projections for gold.

I have been buying XTO energy and it has hurt me over the past few days. I think it is going to be a big winner. I am considering buying more and I do not usually believe in dollar cost averaging. This company fits the perfect profile a winner in my long term view of what is going to happen with our economy and the global economy.

For those of you that have sent emails asking if I have changed my mind as not long ago I was saying that our way of life was not going to cease to exist---Yes in certain areas I have changed my mind over the past few days. We are going to see bigger government and that is going to lead to inflation. If inflation gets going on the global scale how are we going to fight it with our economy in its current state. So one might ask how I think that global inflation can get moving without the U.S. economy rebounding first. The answer is that we are discounting the growth of underdeveloped nations. The average Chinese worker saves 35 cents of every dollar that they earned as compared to the 2 cents of every dollar saved by the U.S. worker. The Chinese are still developing their country to get clean water to their citizens. They must have cleaner air and they must have it now. While we can pull back our spending in tough times and not take as many vacations and buy as many big screen televisions etc---their economy is going to keep chugging along as they continue to purchase the basics to build their economy. They won't cut out nearly as many luxuries as they never had them. Hence, oil, steel, copper, gas and more are going to be in demand. Sound likes all of the ingredients for inflation to me.

In summary, I am only buying stocks that are either energy or metal related. I will have a longer analysis later.


great change is coming said...

Dumbass! You must be a pissed off Republican that is just upset that there was a mandate for change in this election. President Obama is going to rejuvenate the middle class in this country and tax the greedy bastards that have been wrecking the country. Then the markets will gain. Dow 25,000 before the end of President Obama first term!!!

captain caveman said...

mr great change you are only half right. this is a fear monger blog that brings on people like peter schiff. but obama will not help the markets with his tax plans. if you think the dow will hit 25,000 during the next four years you are smoking crack.

Anonymous said...

We are in trouble and the metals, while headed down in the short run are going to be the best investment going forward. We are definitely seeing some short-term deflationary pressures, but the inflation story is real. What is lost in the mix is the dollar's recent strength which has been a factor in the declining price of oil. Stock Shotz is right we are destroying the value of the dollar. When it starts to decline we will see oil begin to rise and then go back to the panic buying that we saw in the summer. It may take a while to develop, but I think the long term projections of your post from a couple of days ago are very realistic.

@great change, youi obviously know very little about the financial markets. Go back to some political blog because it is obvious you will lose your money if you try to invest.

Doug said...

How is the middle class going to be rejuvenated when we are bailing out everybody and now they want us to bail out the auto industry. They greedy bastards work for obama. Hello, Fannie Mae. He was the second largest recipient of contributions from them. If they are so big on really wanting to help the middle class why don't they just spend the 700 B + on paying the mortgages of these families. No, because there special associates would not receive any of these funds.

captain caveman said...

doug you are an elitest. we must bailout the automakers. we bailed out everybody on wall street as they were ruining our wealth. now you do not favor another stimulus which is this time targeted at the heart of our manufacturing sector. in addition to being an elitest you do not have an understanding as to what it is going to take to get our markets going again. i bet you hate baseball and apple pie.

this market is headed up and you will be sorry that you listened to the fear mongers.

Doug said...

Explain why you think the market is headed up. Who is going to invest. Not the average middle class investor because we are paying for these bailouts. We are bailing out everybody but we are not going to have the capital to purchase the products or services. Bailing them out does not solve the problem.
You are right, I hate baseball (it's not like it used to be) and apple pie only with ice cream.