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Timing & trends

Simply "The World's Most Valuable Asset in a Time of Crisis"

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Posted by Porter Stansberry via Stansberry's Investment Advisory

on Wednesday, 28 March 2012 07:00

There's one reliable, common and briliant investment that has proved to be even better than gold or silver in crisis. In fact, since 1970, a year before the U.S. went off the gold standard, this investment has easily outpaced both stocks and gold.

Farmland vs Gold - SP 500

Its certainly reasonable to expect a crisis of the US losing Reserve Currency status and the ability to fund its spending/deficits too,  given its borrowing 40 cents of every dollar it spends & Obama has added more debt than all of the Presidents in history:

Its FARMLAND: Click on either chart or HERE to read the full report

path to prosperity1



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Timing & trends

Doing What Wall Street Doesn’t

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Posted by Chris Mayer - The Daily Reckoning

on Tuesday, 27 March 2012 01:20

Last year, I was at a dinner with a bunch of fertilizer analysts from Wall Street and Toronto. To my right was a guy who was really getting on my nerves:

Annoying analyst: We have PotashCorp at overweight. We believe with the structural deficit in potash that —

Me (interrupting): I have a sell on it and dropped coverage.

Annoying analyst: You did what? What did you do that for? Is your firm making a strategic change in direction? You can’t cover fertilizers and drop PotashCorp! (chuckling incredulously.)

Me: I can. I don’t have to cover anything. I cover what I like. When the Street hates the stock, I’ll put it back at buy.

I think the other analysts thought I had six heads. But I do remember one analyst made a point of coming around to me afterward and asking for my card.

Most of the time I just go with the flow. I am an easygoing fellow. But every now and then I like to tweak these clowns. I remember I was at a conference in which about a dozen companies presented. After one company’s presentation, I got tired of hearing all the softball questions and the overly promotional CEO fielding them. Listening to him, you’d think his company were the greatest thing since sliced bread, instead of a flimsy money loser.

So I got in the queue to ask a question. Finally, I got the chance to ask the obvious:

Me: This may seem like a simple question, but I hope to get a serious response... Why doesn’t your company make any money?

CEO: Excellent question!

But sometimes the Street is overly pessimistic. I remember being at a conference in February 2009. There were about 16 companies presenting. The mood was glum. One CEO stood up and said, “It feels like a funeral.” It did. The world was ending. In six weeks, we’d all be eating dog food and howling at the moon. So everyone seemed to think.

At lunch, at about the midway point, I was just trying to make conversation with the analyst next to me:

Me: So you have any favorites you like so far?

Analyst: How about none of them.

I’ll always remember that. Here were some great little industrial companies selling cheaply. And no one was excited. I left that conference determined to recommendFlowserve (NYSE:FLS), which has done very well since. I met the CEO after his presentation, standing alone in the hallway drinking his ice water. I was the only one who came up to him.

A year later, I went to the same conference. The stock had doubled. But the room was full and the CEO wasn’t alone standing in the hallway after giving his talk.

Sometimes I have to hurdle some skepticism from people who are not sure what I’m up to. I remember I called up one CFO of a small company. I told him who I was and what I did and that I was thinking of recommending his stock, but I had some questions first. I remember he said, “Well... How much is this going to cost me?”

Ha! Obviously, he had been approached by others before who wanted some kind of compensation for writing favorably about his stock. The idea that I was truly independent, beholden only to my subscribers, was refreshing and unusual to him.

Anyway, enough of my reminiscences. It is good to rub elbows with the Street now and then. Sometimes you do get some good nuggets...

Recently, I wrote about the big opportunity shaping up in Europe as its banks look to unload assets. I recently listened to Dan Och give a presentation at a Goldman Sachs conference in New York, which had a little more insight into that idea.

Remember, Och is a pretty darn good investor himself. His Och-Ziff Master Fund has returned nearly 10% annually since inception in 1998. And it’s done so with about a third of the volatility of the market as a whole. So Och’s opinions are not like some random CEO popping off about the market.

Let’s get to the presentation...

Asked about the investment landscape in 2012, Och had this to say about Europe:

“We are starting to see certain areas [that] we consider to be asymmetric opportunities. There’s been some substantial dislocation in credit and structured credit in the US and Europe that are very good opportunities for us... Longer term, we see some big opportunities. For example, European banks at some point are likely to start selling substantial amount of assets, and we’re well positioned for that...

“The vast majority of assets that have to be sold have not been sold. If you look at the proposal that was made in late October by the various European authorities that talked about increasing Tier 1 capital on their banks, a big part of how they intend to do that is selling assets...”

“We’ve been in London for 14 years. We have 65 people. We have a distressed credit team. We have a structured credit team. We have a real estate team. We have all of the resources and capabilities. We’ve done an enormous number of transactions there.”

After hearing this, I started to think OZM itself might also wind up being a good play on the “Biggest Fire Sale in History.”

Regards,

Chris Mayer, 
for The Daily Reckoning

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Joel’s Note: As we mentioned last week, we ain’t never met a mob we wanted to join, nor a trend we wanted to follow. In investment, as in life, it pays to just make like that annoyingly catchy Fleetwood Mac song and just go your own way.

Of course, that’s not always easy. There’s the persistent temptation to feel like a real jackass when you look around and find yourself the only one buying stock ABC, or wearing t-shirt XYZ, or listening to music 123. But if your analysis is good, if your convictions are true, you’ll quite often find the world eventually coming around to your side.

In fact, going his own way has taken Chris Mayer around the world on a seemingly never-ending investment field trip. He’s pounded the pavement in India and China and across South East Asia, South America, South Africa, Australia, New Zealand and his travel agent knows where else. The resulting material colors Chris’ next book, due out any week now, titled World Right Side Up: Investing Across Six Continents.

Now that’s due diligence.

If you’d like to take part in our first ever free book launch, simply head to this link for more info.

Also, Chris will be on RT tomorrow around 4:30pm to chat about his World Right Side Up investment perspective tomorrow. Be sure to check it out.

--------------------------------------------------------

Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com" title="joel@dailyreckoning.com" target="_blank">joel@dailyreckoning.com



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Timing & trends

Critical Issues in Global Economies: Dr. Berry's Presentation to the Federal Reserve

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Posted by Dr. Michael Berry Ph.D

on Monday, 26 March 2012 09:15

The research for this presentation was the most difficult in  the past 8 years of giving this 3 hour lecture.  There are some bright lights at the end of the Credit Crisis tunnel but still some real challenges such as consumer spending, deleveraging and housing foreclosures. 

Topics
1. Banks, Reserves and the Economy 2. Interest Rates  3. Energy Impact: Perhaps the Most Important Factor today 4. Jobs: The Four Letter Word 5. BRICS and Emerging World Growth  6. China: To Be Or Not to Be 7. Critical Economic Players: Consumers and Industry •    8. Currencies: The Race to the Bottom •    9. U.S. Housing 10. Deficits, Debt, Deleveraging, and Moral Hazard 11. Commodities and Their Message 12. Impact on Quality of Life in the West and Emerging Markets 13. Europe on the Verge 14. The Entitlement Conundrum

Screen shot 2012-03-26 at 9.14.05 AM



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Timing & trends

Peter Schiff - Gold, Oil & The Fed’s Greatest Fear

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Posted by Peter Schiff via King World News

on Friday, 23 March 2012 07:40

shapeimage 24

With continued volatility in gold, silver, oil and stocks, today King World News interviewed Peter Schiff, CEO of Europacific Capital.  Schiff told KWN it’s inflation that is causing the move in stocks.  He also discussed gold and the mining shares, but first, here is what Schiff had to say about oil and the situation in Iran:  “I hope we don’t get involved in Iran.  Anytime we get more involved in the Middle-East we create more problems.  Maybe the administration is looking for something to blame the high oil price on, rather than admit it’s excess money printing causing the problem.”





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Timing & trends

Perspective

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Posted by Bob Hoye - Institutional Advisors

on Thursday, 22 March 2012 10:43

ifmarkets

Momentum and sentiment numbers are at levels associated with previous important tops. As noted last week, insider selling has also reached that level. We keep in mind the dramatic Outside Reversal in so many key items on March 8. Some thought it was triggered by Bernanke's comments on that day.

Our view has been that markets were primed for change, and the reversal was a "heads up".

Another such dramatic reversal will be critical.

Perspective

Stock markets have had a very good run. But, in these times there are no long-term trends. Rallies become so compulsive – as do the inevitable sell-offs.

From the troubles of Summer 2010, the S&P rallied 31.7% in nine months.

From the troubles of last August-September the gain has been 30 percent, and counting, in only five months. Fears of October have been forgotten as the favourable season continues. Last week, we noted that firm crude oil prices would "sustain speculative interest in the general stock markets".

Recent interest is focusing upon Apple, which is a phenomenon, and the banks, which is a caution. The latter (BKX) have enjoyed a sharp rally on almost certain knowledge that the "stress test" would be benign [1]. It should be stressed that the test is a computer model build on macroeconomic assumptions. For more than a decade, Mister Market has shown little regard for such models.

The 13 percent rally in a couple of weeks has driven the RSI to the level reached with the high at 59 last April. That was an important high and the subsequent low was 33 in the gloom of October.

One of the features of important tops is that all sectors may not peak at the same time. Base metal mining stocks (SPTMN) topped in late January and the Transports in early February. The recent high for the Oil Patch was at the end of February.

Overall stock market atmosphere is becoming rather heady.

Credit Markets

At the short-end, spreads stopped narrowing a month ago, but have yet to reverse. At the long end – corporate spreads continued to narrow.

Over in the dreadful world of sub-prime the strong rally from October ended in Early February. The price has declined to a narrow trading range. No break down.

The "saucering" bottom in the twenty-year yield has resulted in a distinctive rise in rates. In so many words, the top is in for the bond contract and the action has rolled over. Some of the decline could be due to firm economic numbers, but it is worth keeping in mind that the long bond has been a huge asset in play and the play appears to have ended.

However, the municipal sector has not been doing well. After registering an Upside Exhaustion in February, the MUB has suffered a sharp decline. Last week, the NPI accomplished a big test of the high set in early February. The three-day decline has been interesting.

Commodities

Once again, the street is hot on commodities.

Base metals (GYX) enjoyed a good rally to an RSI in early February that has ended recent rallies. The chart is in a narrowing wedge that will likely fail and set the down trend.

Grains (GKX) are still in a modest rise.

Crude is in a favourable season that could run for a number of weeks.

Currencies

Last week we noted that the dollar was still in the pattern that has led to important rallies. Rising through 80 would be an important step and the action yesterday almost made 81, but needed a little rest. This could run into next week.

Signs of the Times

Last Year:

"Economic Optimism Growing Amongst Brokers"

– Schawb Survey, March 8, 2011

"State of The Stock Market: Bullish Overall"

– Chart Swing Trader, March 21, 2011

"Better-than-expected data on confidence and manufacturing bolstered optimism on the economy."

– Bloomberg, April 15, 2011

"Temperatures Lowest For Time of Year Since 1940s"

– CBS Chicago, April 20, 2011

This Year:

"Global mining industry remains optimistic that the commodity boom is going to run for years."

– Financial Post, March 6

"The outlook for global growth is very good for commodities...it's a good story."

– Business Day, March 8

"The [stock] bull market that no one believes"

– Huff Post, March 14



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