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  • Archive for December, 2006

    No regular post today 12/29/06

    Posted by Frugal on 29th December 2006

    Today is the last trading day of this year. Sell anything that you want to capture capital loss for tax purpose. Since I put out two posts yesterday, I’m going to work on capturing my capital losses today instead of writing another post.

    After new year, I will be reviewing my past market calls from last year, reviewing the current stock market progression, and reviewing how well I invested last year. Don’t miss out. I think all of them are pretty interesting. Throughout the entire last year, I only made one major move. Want to know how I did?

    Reviewing the past is always good. Without learning from the past, you cannot get better.

    Good luck trading. Don’t be too aggressive and greedy.

    Have a happy new year & relax.

    Frugal

    Posted in Announcement | Comments Off

    What will New Year Bring for the Stock Market?

    Posted by Frugal on 28th December 2006

    This is just a short post based on my hunch. Don’t have much time to elaborate. To put it short, I believe that after Jan 1st 2007 holiday, the very first week of the stock market will be DOWN.

    If you want to listen to me, you could do so. You can sell TODAY or TOMORROW, and buy back later (at least after 1 week I believe).

    Why? I think people will want to lock in their gains for the past 4 to 6 months. Plus that Xmas retails seem to be bad.

    And then, after the selling, it will go back up and push for record high again. These talking heads on Wallstreet will keep saying Bernanke will be lowering interest rates very soon (which I don’t believe that he will do after probably mid-March or even till May).

    I think I will lighten just a little of my own portfolio, since I’m still under-investing in the general stock market.

    Here is what James (who also posts regular here) is saying:

    ** We are finally getting some clues from commercials in regards to the stock-market: there was significant commercial selling in the Dow Jones and the Nasdaq-100. The stock-market looks like it has made/making a top. Notice also that commercials are buyers of the VIX, this again is forecasting that a healthy dose of volatility / fear is coming to the market indicative of price declines. Will the decline come in the last week of 2006? I would assume not, as the trading is light ahead of the holidays, but I am far from certain. In any case, if it doesn’t come in 2006, watch out in 2007.

    Right now the only index that looks anything close to being bullish is the Russell 2000 with commercials currently at a total of 6,793 contracts NET long; as long as we remain above 5,000 I am less bearish than what I would otherwise be. But that could change by the end of this week for all I know, so keep checking the data, because when/if the markets do breakdown they will not wait around.

    ** Crude oil is not doing much, but remains setup for a rally. Commercials are buyers of gold during the most recent pull-back, I do not see a setup yet, but it is getting close.

    ** The US dollar broke down while being setup for a rally, this was unusual and presented a buying opportunity. The setup continues to point to higher prices for this market.

    I disagree with him that market will top here. I still do not believe that market will top here. I think there is even a slight chance for S&P 500 to come close or exceed its all time high before falling BIG time. That’s simply about 5% up and then S&P 500 will hit 1500. And the entire wallstreet will probably go partying in the first quarter, which would be the time to sell.

    I do worry a little about James’ comments on $US rallying. I’m holding tight to my precious metal positions, but I’m still neutral. If a potential war with Israel and Iran breaks out, precious metals should be UP. Other than that, I am still in a holding pattern.

    Right now, I believe the following three scenarios could unfold for precious metals & oil & general stock markets (in all scenarios, I believe that stock market will be going up overall in Jan/Feb, and maybe even March. I’ve explained my reasons already.):

    1. 30% chance: War between Israel and Iran breaks out in the first or second quarter. Precious metals and oil go up. Stock market goes down first, comes back and rally but fail (lower high), and goes down towards at least October 2007. Precious metals will begin its second phase of rising which according to elliot wave will be the longer wave. In this scenario, precious metals may be falling before the war.
    2. 40% chance: No wars. Stock market corrects one to three times with small magnitude. S&P 500 exceeds all time high, while maybe NASDAQ reaches above 2500. Then stock market corrects by 15% or more. In the meantime (starting from Jan), oil stocks rise with smaller magnitude. Precious metals rally are either contained/failed. Then all sectors fall along with general market. Precious metals then make another significant bottom possibly after next June/July. The PM rise after that will be however very solid. It should be that “the train is leaving the station”.
    3. 30% chance: anything that I cannot come up with.

    I’m guessing that there is a 80% chance of me making myself a big fool, when I look back on this outlook, :) . The above scenarios are based upon my believes of

    1. The correction in precious metal sector is probably NOT long enough. I would feel more comfortable if the correction last at least some 12 months, which would be after May 2007. If it’s 10 months, maybe it’s okay. 10 months will put the next bottom at the end of Feb 2007. The current correction seems to have bottomed in 5 months from May to Oct. I think that’s a little short after a semi-parabolic move in gold/HUI from Jan 1st to May. (I hate parabolic moves. It means it’s game over after the fall. However, I do not certify the May move in gold as fully parabolic.) Maybe all the weak hands have dropped out by now. I do hope that I’m wrong on this. According to Mark Hulbert’s sentiment study, contrarians are pointing to precious metals outperforming stock market somewhat next year. By the way, seasonally before Chinese New Year on Feb 18 2007 should be strong for physical gold markets.
    2. I believe that oil sector will FALL along with general stock markets. The fall will be associated with the economy slowdown. The fall may be limited in magnitude. Crude oil would not surpass $80 anytime soon, unless there is a prolonged war between Israel and Iran. Oil stocks however will gradually outperform crude oil due to $45 oil price expectation adjustment. 2008 and beyond should be very good years for oil sectors if oil can consolidate solidly in the first half of 2007.
    3. I don’t believe the top of the stock market is in. But I don’t believe stock market can keep its happy face for too long either. I think some people is going to cry uncle next year. And uncle Sam will respond too (if not responding already). Again, I can be wrong.
    4. I think it will be necessary for Bernanke to cut interest rates next year. So somehow somebody needs to hammer Wallstreet talking heads and tell them that there is an economy slowdown. Probably Fed’s strategy was to get the stock markets up first so that there is enough room for falling. Bernanke will use that chance to lower interest rate to save the housing market. But long term bond market MUST co-operate. If bond market is not scared by slowdown/deflation talk, then Bernanke will be unable to lower interest rate. Is this the reasons that Bernanke et al went to China recently? It is very possible that bond market does not cooperate, which probably would mean that $US is falling, or gold is rising, or oil is rising, or maybe neither. I do believe that there is just not much more rooms for 10 year and 30 year bond yields to fall further, even if they fall.

    Alright, this is really getting too long.

    Posted in Gold/Silver, Market Pulses, Stock Market | 8 Comments »

    Carnival of Real Estate is Up

    Posted by Frugal on 28th December 2006

    Here are all the great money/finance carnivals featuring 1stM@33 submissions. Please visit them for more good readings.

    1. Carnival of Real Estate #23

    That’s it for this week. (Oops, I forgot to participate in carnivals! It’s holiday time….)

    Posted in Announcement | Comments Off

    Misc comments on tax

    Posted by Frugal on 28th December 2006

    A reader asks me about some tax advice to save on tax without setting up some complicate business structure. I wish I have more things to tell him and you. But the fact is that even if you have some rental business going on, your passive loss deduction is limited by the rental income, and even with active participation, the loss is limited to $25K, and will be phased out when your modified adjusted gross income reaches more than $150K. Now, $25K is a lot but not much in these days. A conforming loan of $417K at 6% mortgage interest rate will put you over $25K mortgage interest deduction.

    My advice is to stuff some money into spousal IRA account, and then Roth IRA account, both of which you should probably do, AFTER you finish your taxes if your total income including all bank interest, capital gain, etc. is near $140K. The reason is that it is possible for you to hit the phase out limits around $150K. I hit that once, and I ended up filing form 8606 so that I can up the basis in my spousal IRA account. When I make a distribution 30 years down the road, I don’t need to claim those after-tax dollars that I put in as before-tax income.

    There is really no “magic” way to avoid paying tax (unless you earn all of your income through having a business). Every year when I look at the amount of taxes that I’m paying, I feel a little down. But on the other hand, I actually feel that I am happy to contribute my part to the US treasury chest. Even though government is kind of wasteful, and they don’t spend every dollar according to your wish. But at least you know that some part of your tax money do go to the necessary social welfare programs that pay some elders’ bills and their medical bills. Furthermore, the total tax as a percentage of your total income is actually no where close to your marginal tax bracket. There were a couple of times that I hit a marginal tax bracket of 42% including state and payroll tax. That’s quite a lot, but hey, I was glad that I had those income to be taxed. In fact, I didn’t have any child credits, my exemption amounts are being phased out, and I got hit by alternative minimum tax.

    The only tax that quite gets me is the tax on capital gain and dividends. Government inflates which causes everything to go up including your stocks, and you still need to pay tax on their sins. It’s really not that easy to achieve a positive return after-inflation and after-tax. There have been many discussions about tax reforms, and I fully agree that we should change to a consumption tax system. I am fully behind such system, even if the sales tax is more than 30%. Such system will level the playing field between business owners and salary earners.

    In any case, I’m sorry that I cannot be more helpful. I’ve heard people setting up business to channel their daily expenses. I would not advise that both on a legal and ethical basis. There are always some gray area for certain expenses, but to spend a majority of personal expenses as business expenses, hmm…. No further comments.

    Posted in Tax | Comments Off

    Test driving Zecco.com, part 2

    Posted by ML on 27th December 2006

    Gathering from your questions after the first part of this review, there is a lot of interest in Zecco.com and their promise of zero commission trades. In the concluding portion of this review, I’ll describe my impressions about their order execution, answer some reader questions, as well as relay some difficulties I’ve been having.

    Order execution
    First of all, Zecco is true to the name. Both buy and sell orders, market or limit, are free. You do have to pay the usual SEC fees upon selling. At $30.70 per million it shouldn’t break anyone’s bank.

    Zecco claims the industry standard of 30 seconds for order handling. It doesn’t offer level II quotes but through another online broker I was able to see my limit orders routed through the Pacific Stock Exchange (PACX) only seconds after they were entered. On one occasion, I modified an existing limit order and it took over a minute to appear. It’s probably faster to cancel existing orders and enter new ones rather than using the “modify” function if such things matter to you.

    Zecco also offers stop market and stop limit orders, but not conditional orders. I give their order execution a 4.5/5.

    Reader questions
    TJP asked if they offer dividend reinvestment. My original answer was “no” which was incorrect. From their FAQ,

    Does Zecco Trading allow account holders to automatically reinvest dividends for equities and exchange traded funds?
    Yes, dividend reinvestment is a feature that is available to our clients and can be setup during the account opening process. If you would like to add this feature after the account opening process is complete, you must submit the request in writing to our customer service department.

    However, you can’t buy fractional shares at this moment.

    Taz asked if there is a fee associated with ACH transfer. The answer is no, but it may take up to three days for the money to go through. Taz also asked a question regarding the $2500 minimum account balance to get zero commissions. The account balance is defined as the sum of the market value of all the securities and the free cash balance. The minimum applies to the account balance, not the free cash balance, so it doesn’t keep the $2500 tied up.

    Trouble with my account
    I’ve received reader comments about how thrilled they are with Zecco. Not surprising given what I’ve said so far. However, I have been experiencing some serious problems in my account personally.

    This is what happened. I opened the account primarily to test a momentum trading model with holding period of several days on average. Naturally, the promise of zero commission was extremely attractive. My first trade involved 50% of the capital and lasted 5 days with a 1.4% profit. Everything went smoothly and I was able to use the full amount right after exiting that position (customary in a margin account). My second trade deployed close to 100% of the capital which I exited 2-3 days later at an average profit of 1%. However, I noticed that my cash was locked up for 3 days (customary in a cash account). To my horror, I also noticed that my balance became much less than what it should have been.

    For some reason my account was deemed “subject to IRS backup withholding” of 28%. The punch line was that it was 28% of sales, not of profits. So after two profitable trades that turned over nearly 150% of my capital, my account is down 150% x 28% ~ 40% from what it should be.

    Apparently, this was caused by some missing paper work. It happed frequently enough that Zecco actually has a page about this, titled, no joke, “Where is my money?” There is also an active thread in their forum about this.

    Here are my gripes,

    • I followed the instructions after the on-line application and mailed in the signed W-9 form. My missing form (not required for all applicants) was not mentioned in those instructions. I found out about the missing form after the withholding had already taken place by calling customer service. As a matter of fact, the customer service rep promised that someone would contact me regarding the form, but no one did and I got the form myself from their website.
    • My biggest gripe was that nowhere on the website was there any record of the withholding. It was as if the money simply evaporated. If you follow the forum link above, you will find the issue was first raised at the end of October. The president of Zecco actually responded to that thread so I’m sure management is aware of this. Elsewhere on their website they say they are working with Penson, their clearing firm, to resolve that issue. At any rate, they have known the problem for at least 6 weeks and nothing has been done. This is unforgivable because I can’t imagine a more pressing concern than proper accounting of the customers’ money.
    • I faxed as well as mailed in the hard copies of the required forms last Tuesday. On Thursday there was a power outage in the middle of my call with a service rep. On Friday, I was finally able to confirm that all the needed paper work would be in place after the hard copy arrives.
    • Through out this ordeal, my emails were never answered. It was quite tricky to reach a live operator, although I’m getting good at it.
    • On more than one occasion, the customer service rep had to put me on hold for several minutes while looking up my file which makes me question their information organization system.

    The other problem I had with money market sweep was probably related. Currently, I’m earning only 1% on the free cash balance. One person from Zecco’s marketing department contacted me to offer help after reading my remarks in the comment section of the previous post. I declined since I wanted to have the perspective of a typical customer.

    They did say on their website that if they don’t receive the proper paper work within 30 days, Penson will forward the withholding to IRS. For now, I can only hope that I get money back soon.

    Conclusion
    One reason I waited so long to finish my review was that I was simply livid about the missing funds. As they say, you shouldn’t go food shopping while hungry… Bad analogy but you get the picture. Had I written this a week ago the tone would have been very much different.

    I decided to try Zecco in the first place because of their “anti-establishment” feel, and I still want them to succeed. But I have to face up to how unpolished they are now. So I’ll make the following limited recommendations. I think Zecco is good for:

    • Experienced online investors who use Zecco as an alternative account. This is somebody who knows exactly what she wants and who sets up everything right in one shot.
    • Novice investors who care a great deal about trading cost and who is content with the basic buy and sell operations.

    If you do decide to open up an account at Zecco, do learn from my experience: send in all your forms!

    Posted in Investing | 28 Comments »

    Pennies Worth More than a Penny

    Posted by Frugal on 26th December 2006

    I’m sure you’ve read the news somewhere else already. The penny coin now costs 1.74 cents to manufacture, while the nickel coin worth of 5 cents now costs 8.74 cents to make. And according to NY Times, now the United States Mint is considering changing the metal compositions of the coins, and banning export and melting down of coins.

    The new ban also forbids exporting pennies or nickels in any significant quantities. While the Mint is not concerned about tourists’ pocket change or numismatic collections, it wants to block wholesale export of coins to countries where recycling them for their metal content could be economically viable.

    Penalties for violating the ban can include a $10,000 fine and up to five years in jail. “We want to make it clear to anyone considering this that it’s not worth it,” Mr. Moy said.

    Back in the days of Roman Empire, the coin compositions were changed to manage the inflation too. More and more cheap metals (copper/zinc/etc) were added into gold & silver coins as time goes on. However, legally they would tender the same amount. People then would hoard/hold onto the more precious original coins, and the bad money drivers out the circulation of good money. Of course, prices of things wouldn’t cost the same as before in terms of the “bad” coins. Inflation ensued, and contributed to the demise of the empire.

    “Once upon a time” the one ounce American Gold Eagle is worth only “Fifty Dollar” which is engraved onto it, and the one ounce Silver Eagle is worth only “One Dollar”. Now gold costs about $630, while silver costs almost $14, a monetary depreciation of more than 13 times. If you’re 100 years old, you won’t be wondering why those stupid numbers of “Fifty” & “One” are engraved on those gold/silver coins.

    I guess that we will be getting new nickels and pennies pretty soon. I hope that they won’t disappear altogether, or become made of plastics one day.

    Posted in Gold/Silver, Miscellany | 4 Comments »

    Happy Xmas

    Posted by Frugal on 24th December 2006

    No post for tomorrow 12/25.

    Happy Christmas!

    Posted in Announcement, Investing | 2 Comments »

    Net Commercials And VIX Part II

    Posted by James on 22nd December 2006

    vix-gaps.png

    Volatility Index [ http://www.buythebottom.com/vix.gif ]

    Net-commercial position decreased by 1,456 contracts as the Volatility Index (VIX) challenged its October-highs, and subsequently declined. What is essential to understand is that the VIX has a tendency to revert to the mean. Anytime the VIX experiences a persistent move in any one direction, there is a very good chance for the VIX to reverse and move in the opposite way. So after the most recent decline where the VIX moved down from roughly 12.50 to as low as 9.50 on Friday…from here, the VIX is most likely to rally. This means that in the short-term (1 – 5 days) the market is very susceptible to reversals. From a fundamental perspective this is due to the very high level of complacency in the marketplace which tends to correlate with market-tops.

    Another interesting note worth mentioning is that the VIX tends to fill its gaps within a relatively short period of time; assuming that the market is not crashing where the VIX would probably see a breakaway gap. Currently there is a gap in the 12 area, marked by the blue rectangle. I would expect this gap to be filled, sooner or later. And if this gap is indeed filled, then that means some fear returning into the market which correlates with lower prices for stocks.

    The problem now, however, is that a second gap was formed today in the 10 – 10.50 range. Unfortunately I cannot see the COT data until the end of this week, to find out whether commercials were buyers during the dip on Friday of the VIX. If they were, then it would be logical to expect the VIX to continue rallying to fill the gap at $12 as stocks experience a decline, and then after that for the VIX to decline back to the $10 range to fill the gap #2, while stocks stage a rally.

    Broad Markets

    Russell 2000 [ http://www.buythebottom.com/rut.html ]
    Net-commercial position increased by 474 contracts.

    S&P 500 [ http://www.buythebottom.com/spx.html ]
    Net-commercial position increased by 3,454 contracts.

    NASDAQ 100 [ http://www.buythebottom.com/ndx.html ]
    Net-commercial position increased, yet again, by 940 contracts.

    Dow Jones [ http://www.buythebottom.com/indu.html ]
    Net-commercial position continues to hover around the -22,000 level, increasing by 138 contracts to a net-total of -22,320 contracts

    In the shorter-term I would look to the VIX to gage market direction, the VIX has two potential targets: gap #1 and gap #2. (Refer to the VIX chart above). In the intermediate-term it looks like higher prices are still to come, while longer-term we are probably headed towards a major top. From the current COT data, I would not start worrying about any top until we see significant deterioration in the NASDAQ-100 and Russell 2000 COT charts.

    Commodities

    Crude Oil [ http://www.buythebottom.com/wtic.html ]
    Net-commercial position decreased by 8,486 contracts. USO (oil ETF) did not yet breakout above its resistance level at $55. Until then, the bottom in oil is not yet confirmed from a technical analysis perspective. However, the setup remains to the upside, unless of course we see commercial selling accelerate. As long as net-commercial position continues to hover in between -10,000 and 20,000 the COT setup is bullish; watch for more clues in the coming weeks.

    Gold [ http://www.buythebottom.com/gold.html ]
    Net-commercial position increased by 3,886 contracts. The commercial setup continues to support a down to sideways period in the next little while. I remain neutral to bearish on this market, until I see noteworthy commercial activity on the buy-side.

    Currencies

    US Dollar [ http://www.buythebottom.com/usd.html ]
    Net-commercial position increased by 9,094 contracts. This is the kind of commercial buying that I was expecting to see after the dollar broke down, but then again it does not really matter what I was expecting, the point is that commercials are very big buyers of the US dollar…which means that this market is very bullish and setup for a rally. Also, make note that from late October to present-day, net-commercial position increased by 33,978 contracts. This is a very significant bet from the commercial side, and is forecasting higher prices for this market in the not too distant future.

    Posted in Investing | Comments Off

    No Title/Subject

    Posted by Frugal on 21st December 2006

    Test. Nothing here. Don’t read. Test. Nothing here. Don’t read.
    Test. Nothing here. Don’t read. Test. Nothing here. Don’t read.
    Test. Nothing here. Don’t read. Test. Nothing here. Don’t read.
    Test. Nothing here. Don’t read. Test. Nothing here. Don’t read.
    Test. Nothing here. Don’t read. Test. Nothing here. Don’t read.

    This is a holiday season, and a perfect time for me to divulge an investing secret that I don’t like to share with too many people. Only the ardent followers of my site will get to read it.

    Do you know why I bought gold back in 2002 for $305? Was I really that smart, and forsaw the future gold price? NO. Absolutely not. I didn’t know that much about gold, but I remembered and followed the advice of the smartest financial wizard that I ever know of. It’s a lot more important to follow the smartest people than being smart.

    Maybe some of you know the name of this guy. I may be writing more about him, but I won’t be spelling his name correctly so that Google Search won’t find my post. There is too many ugly things going behind the scenes that I don’t want to get myself into trouble either.

    He is the ONLY person that I know of who has successfully predicted stock market crashes at least twice (and maybe more), 1987 US and 1990s Japan. His prediction came months earlier, and the date was probably down to within a couple of weeks if not days.

    So what did this guy say in 1999? Gold’s bottom at about $250, and any price below will be the DEAL of the CENTURY. If I recalled correctly, he also correctly stated in 1999 that gold has PREMATURELY made a false bottom in 1999. It turned out to be a double bottom made in 1999/2001.

    I waited for “the deal of century” to appear but it never did, and I couldn’t affirm whether gold had successfully bottomed because his numbers were so right on target. After it rose above to $300, I realized that the tide has already turned, and I bought in. I kept investing in gold, without realizing the alternative unfolding of his prophetic words: tangible assets will keep going up towards 2007. And that was real estate. In fact, Fed successfully diverted the monetary tide much more into real estate than other tangible commodities. Obviously, I was looking for the usual real estate slowdown after a stock market crash. But of course, history only rhymes, but never repeats.

    When I read his articles before he went into jail in 2000, one of the article he talked about economic forecasting which is really fascinating. He compared quantum mechanics physics with classical mechanics physics, and how economics seemed to be so unpredictable. But through his studies, he has found that economics is more like classical mechanics. Once a motion is set forth, it is hard to turn it around. Basically, long term economics forecasting IS predictable and forces of the economics were often seeded YEARS earlier.

    He made such an impression on me that I wish I remembered every word he said. Unfortunately, this guy was jailed in early 2000, and has been jailed because of contempt of the court (he cannot surrender the “cheated” money to court because all of his assets are confiscated and all of his managed accounts have been conmingled and most likely stolen by a guilty bank). He was jailed for almost 7 years now, and has NOT been given a trial at all. His trial if there is ever one got postponed and postponed and postponed, and in the meantime during these 7 years he simply kept waiting for a fair trial. And this is happening in USA, the land of “free” and “brave”? Just this year, finally he, an old man, admitted guilty by force and still without a trial.

    I wish I’m lying, but I’m not. This reads almost like another fabled story. Unfortunately it is true, and so true for this poor and great economist. Both US and Chinese government had tried to obtain his economic forecasting model without success. So he was jailed for “good” probably in the opinion of USA. His predictions on financial markets were too accurate and too scary to the power of authorities. This is like what’s happening in “Enemy of the State” movie.

    In his economic models, he also forecasted that there will be an international debt market crisis (and you know which currency, right?) In his economic models, there is a period of pi or 3.14159 *1000 = 3141 days. He said it’s a magical nature number. I fully agree, but having a minor in physics from college, I cannot concur that 1000 is a magic number. I don’t buy his theory of pi * 1000 at all, because I cannot explain how 1000 is a natural number in nature. However, for whatever reasons, 3141 days seems to be the magical period for economics through his studies.

    He models within every 3141 days for 3 peaks, with the centered peak being the highest. However, only by collecting ALL international money flow and data from financial markets, and then run through his artificial intelligent computer model will you get the type of asset that will peak or bottom.

    Do you know when is the next MAJOR peaking date? It’s Feb 25, 2007. And that has been the major reason that I have stayed put for my precious metal positions in the face of 2006 April’s Hindenberg’s Omen. And the reason is that I believed that the peak in 2007 may be even higher. But of course, I was aware that I didn’t know which asset class/index will be peaking in 2007. After the correction in precious metals in June/July, it started to become clear to me that actually the more likely candidate for peaking is the general stock market. I started to call to PUT money into the general stock market repeatedly through the fall season (well, if you were reading my advice back then). And so many analysts have called a stock market correction since its rise. But I know/believe that the MAJOR stock market correction will not come most likely until late Feb of 2007.

    YES, it will be a TOP, and it is still not top YET.

    I didn’t know whether it will be a peak date for real estate, or precious metal, or stock market. But I knew that the peak of real estate is either 2007, or summer of 2006 as predicted by UCLA professor Sornette. Certainly, real estate is out of picture. And certainly precious metals are too late to rise up to a NEW record high in my opinion. So, it has to be the STOCK market. And you bet that I will sell for sure. And sorry, I may or may not remind you. An investing secret that is too well-known will simply not work for sure. In fact, I know that there are (at least 2) investing professionals out there well aware of this mystical PI date.

    Forget about 4-year election cycle, or 8-year cycles. I believe this 8.6 year cycle is more accurate than anything else. 1987 stock market crash fell on the EXACT PI date if I recall correctly.

    If you want, you can google this guy. His full name is gnortsmra nitram spelled backwards. Again, don’t put his name in my comment section. I will delete them, since google also pick up words in the comments. It’s a little hard to google things out on him. You may need to add other relevant words, or else you won’t get the right things come up. After 7 long years, it’s becoming exceedingly difficult to find his written articles from the past.

    And currently since precious metals will not peak in 2007, I believe that they will have more bull runs after that.

    By the way, it may not be a game over for stocks. I tentatively believe that 2009, the next significant date in his model, will be more important peak date in terms of absolute price (but maybe not in relative price to gold).

    I would pay more than $1000 for his research if it’s available. But now I’m kind of on my own, reading thousands of articles every year (about 15+ article a day), while watching various markets and observing closely where the money is flowing. After several years of investing in gold, I have become convinced many of the arguments made by gold bugs and peak oil people. I don’t know whether there will be an international debt market crisis as once predicted by this guy, but I can definitely conjure up ways and reasons of how it could happen, especially through peak oil theory.

    People like to be optimistic about future, and take a more linear view on things rather than understanding cycles. But between peak oil and global warming, I would really much prefer peak oil. Truly, peak oil will save the Earth, despite the potential economic havoc that it could cause. More on this later, until next time….

    Posted in Miscellany | 23 Comments »

    Mom’s Advice Blog

    Posted by Frugal on 20th December 2006

    Definitely check out MotherLoad: The MomAdvice Blog for Carnival of Frugality in this Xmas shopping season. I hate to miss out something when I should have given credit. So this is a special short post for that blog. Looks really nice indeed.

    Posted in Investing | 1 Comment »