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"Another lesson I
learned early is that there is nothing new on Wall Street.
There can't
be because speculation is as old as the hills.
Whatever happens
in the stock market today has happened before and will happen
again."
- Jesse Livermore
It was another volatile week for the markets
leaving the major market indexes down about 1% across the
board. The headlines out of the Bernanke testimony were a
little harsher than what we heard from the Fed the week before,
all in all last week was filled with surprises. Let's
start with…
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"I've
never seen so many men
wasted so badly."
- Blondie (Clint Eastwood's character in The Good, the Bad & the
Ugly.)
|
...the Good
Despite headline-grabbing
ups and downs in the stock market over the past three months,
the market ended the first quarter pretty close to where
it began on January 1.
- GDP growth exceeded forecasts and was revised
up from 2.2% to 2.5% for 4Q 2006.
- Chicago PMI also brought
good news as it surged more than expected.
- Crude oil was
up 7%, heating oil rallied 10%, natural gas improved 5.6%,
and gasoline lifted 4.6%. $GOLD was up +11.70 (+1.8 pct)
on the week. Commodities:
$CRB rallied +5.94 (+1.9 pct).
This is good for
investment positions in energy and commodity related
sectors thanks to inflation data.
...the Bad
- Feb Durable Goods orders rose +2.5 pct,
which was 1 full point less than expected, and the Jan
orders were revised
down to -9.3% pct from -8.7 pct.
- Housing stocks took a hit on
news that Beazer was under investigation for their lending
practices. New home sales data was also very poor and
lets not forget all the problems surrounding sub-prime mortgages.
- Inventories
of oil, distillates and gasoline also fell last week,
keeping prices high.
- Crude oil rallied
over $5 since last Thursday's
close as the Iranian's continue to hold British
soldiers
...and the Ugly.
In our last Ford Wealth
Report, we highlighted
the term 'stagflation' for our readers
because we expected it to grab the financial media
attention...and voila!
- Stocks,
bonds and the dollar all declining as Fed accepts stagflation
for a fact for the first time - India
Daily, March 31
- Stagflation
a growing 'possibility' - MarketWatch,
March 30
- Food
price spike fuels stagflation fears - Canada
Daily, March 21
Stagflation
is a lethal cocktail that hasn't reared
its ugly head since the late 70's. With the growing
evidence of a slowing economy, higher oil, commodities, and
interest rates with a falling dollar all
the ingredients are in place for a return to a troubling enonomic
condition that investors long ago feared. We continue to
be invested in a defensive nature focusing on absolute
investment strategies and inflation protection securities
(TIPS,
Commodities, Precious Metals)
For readers who would like to read a more in-depth article
on stagflation: Five
Things You Need to Know About Stagflation
| Returns through 03/30/07 |
1-Week |
Y-T-D |
1-Year |
3-Year |
5-Year |
10-Year |
| Dow Jones Industrials |
-1.0 |
-0.9 |
11.2 |
6.0 |
3.6 |
6.5 |
| Nasdaq Composite |
-1.1 |
0.3 |
3.5 |
6.6 |
5.4 |
7.1 |
| Standard & Poor's
500 |
-1.1 |
0.2 |
9.7 |
8.0 |
4.4 |
6.5 |
Source: Yahoo! Finance, Barrons
Past performance is no guarantee of future results. Indices
are unmanaged and cannot be invested into directly.
Three-,
5-, and 10-year returns are annualized. Assumes dividends are
not reinvested.
Greater Fool Theory:
A theory that states
it is possible to make money by buying
securities, whether overvalued or not, and later selling
them
at a profit because there will always be someone (a bigger
or
greater fool) who is willing to pay the higher price. 
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are 80 pieces of gold. One of them is lighter than the others.
You can weigh only 4 times to find out which one is lighter. The Question: How do you go about finding the
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Best Regards,
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