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  • Archive for December, 2009

    Mish blog has been removed?!

    Posted by Frugal on 21st December 2009

    I’m trying to read one of my favorite blog by Mish at http://globaleconomicanalysis.blogspot.com, and I’m getting this message:

    Sorry, the blog at globaleconomicanalysis.blogspot.com has been removed. This address is not available for new blogs.

    I hope that there is some mistake on the part of eBlogger (belonged to Google), but my personal experience with Google Adsense was definitely not very friendly.

    It is quite sad if his blog were removed. I’m sure he has made numerous enemies around the country, due to his quite negative stands against Federal Reserve & various levels of government. I would personally offer him free hosting space, since Dreamhost allows me to have two different domain names.

    I hope to see his blog back online ASAP. On the internet, it’s still the big boys that get to call the games unfortunately. We cannot afford to have monopoly to degrade the internet experiences that offer us various opinions from different bloggers.

    Posted in Investing | 2 Comments »

    Ironies yet to be: Bernanke on Time Magazine

    Posted by Frugal on 17th December 2009

    Helicopter Bernanke has been chosen as the Person of the Year 2009. That is just ridiculous in my personal opinion.

    For someone along with Greenspan created the single biggest housing bubble (in size) in human history so far, bailing out all the guilty parties and mopping up all the mistakes with even greater mistakes through printing of more free money, he is “coined” as the savior of the economy from another great depression. A country does not attain prosperity through devaluing its own currency. Such acts when the confidence game is up will be met with great consequence. I have no doubts that history in the future will not have kind words for Bernanke, nor Greenspan (whose reputation has already been turning thru this financial crisis).

    Aren’t you glad that banks are paying back all the TARP money? I guess all of them are hopeful eternally, and wishing that all the option ARM and alt-A borrowers will be paying back more when they start to reset to 25-year amortization schedule, starting now until the end of 2011. I think banks are very likely to negotiate all the option ARM mortgages back to 30 years or longer if possible. However, the biggest problem is that once the mortgages are re-negotiated, the mortgage payment will NO LONGER be less than the prevailing rent. Furthermore, who is going to pay down more principal towards a property that is already 10% to 20% under-water? I expect that the two factors combined will cause significant portion of the borrowers to simply walk away, or become home squatters to take advantage of one year of free rent through foreclosure process.

    So when the hands of banks are tight, and they will tighten even more on the new loans. Some will probably go under and join the weekly FDIC’s Friday parade, and some may come back and ask for government money again. Ha, except that for the second time when they want to dip the “honey pot” again, the money will not be available because American and politicians will be so upset and simply shut down the institutions. If they are able to sustain without asking for more money, you can be sure that lending in economy will take a dive, driving USA onto the same Japanese-style deflationary track. But don’t worry, our beloved Helicopter Bernanke will come in his helicopter in a hurry, bombing free money from the sky at the fastest speed. It is likely that in the not-too-distant future, we will see a more volatile stock market, dropping at first due to the resurgence of financial crisis, and then zoom back up and onto new highs (higher than 2007) due to out-right devaluation of US dollar.

    By the end of 2010, US fiscal deficit will probably end at 13.5 trillion dollars or more. The speed that it will increase will be exponentially faster until it collapses. Before US goes full speed on this exponential debt curve, there may be still a chance of stopping before the point of no return. But such opportunity does not exist as long as Bernanke is still in office as Federal Reserve chairman. I guess Greenspan will be remembered as the Bubble Man, while Bernanke may be remembered as the Bubble-death Man, who would blow up the final bubble in $US and US bonds, without any further ability for US to attract/wield global capital.

    Posted in Stock Market | 2 Comments »

    Gold going gangbuster

    Posted by Frugal on 2nd December 2009

    Gold just made a new high at $1217 today. I believe that it can easily go to $1300, and possibly touching $1400 before pulling back. BUT it can also easily fall back to $1080.

    The bottomline is that I don’t know whether it will go up or go down tomorrow. But nobody else knows either for sure. However, recognizing your own ignorance is often better than being the best trader in the world to try to catch the lowest point and cash out at the highest point. This strategy is especially powerful in a true bull market like gold.

    As I have explained in my post on Kelly’s Criterion for investing, such strategy is very well suited for an asset class that is in a bull market. Simply buy more when it falls, and buy less when it goes up. This strategy goes counter to a traders’ mind, of cutting your losses early, and placing stop orders. And as I have also said in my post that such strategy WILL bring extreme volatility beyond the tolerance of most people. The obvious risk for such strategy is that one must ascertain the validity of such a bull market.

    It is clear to me that gold & mining stocks are in a major Elliot wave 3. I don’t know whether this is wave 1 of wave 3 (which I’m leaning towards), or wave 3 of wave3, but either of the up waves should be quite strong.

    So the train is leaving the station. Are you on or not?

    Posted in Gold/Silver | 4 Comments »