The "Maui", "Oahu", Singles Investment Club Blog

SAFETY NET PROGRAM PROGRAM UP 8% IN LAST TWO DAYS, HERE'S WHY!

               

Thanks to the U.S. housing bust — plus the Fed's response to the crisis — the U.S. dollar has now plunged to its lowest level in history, driving foreign currencies, gold, silver and other natural resources sharply higher. With no end in sight to the housing bust, and with the spreading credit crunch in the U.S., and even deeper decline in the dollar is now unavoidable.

NEW CONSIDERATION FOR THE "SAFETY NET" INVESTMENT SELECTIONS.

The general market has finally acknowledged that a "slow-down" is finally upon us.

Not only is this bringing the geneal stock market down, but is affecting even our great performing "Natural resources" investment selection. Why because if the U.S. and the World, for that matter, is entering a slow-down, this will reduce the amount of oil consumed, resulting in the price of oil falling. We kind of know this rally won't happen, but Wall Streets "sells" and asks questions later.

Because of this, I am recommending that you reduce your holdings of "natural resources" to no more than 25% of your selection portfolio.

Here's the recommended investment choices as of today (the 3rd):

Precious Metals
Interest rate opportunity fund
Natural Resources
Money Market

Good luck with your choices,

John

WHERE IS THE GENERAL MARKET HEADING? LOOK FOR A 500 RALLY,THEN DOWN AGAIN!

Carl Swenlin | DecisionPoint

 

RESISTANCE THREATENS RALLY

In my January 18 article I asserted that we had entered a bear market based upon long-term sell signals generated by downside moving average crossovers on the daily and weekly charts of the S&P 500. My bottom line summary was as follows: "Probability is very high that the bull market top arrived in October 2007 and that we are now in a bear market that will continue for another year or more, possibly until mid-2010. Until we have evidence to the contrary, remember that bear market rules apply. The next thing to expect is a reaction rally back toward the recently violated neckline support, which is now overhead resistance."

Just a few days later the expected rally began, and the neckline resistance has been penetrated, albeit not decisively. While the market's recent performance has been good for bulls, you can see on the chart below that strong overhead resistance in the form of the long-term rising trend line lies dead ahead.

GOLD BREAKS THROUGH $900!

NEW YORK (MarketWatch) -- Gold futures surged over $22 to finish above $900 an ounce on Thursday, as traders' appetite for the precious metal was boosted by a recovery in U.S. stocks and dollar weakness.

Gold for February delivery rose $22.70 at $905.80 an ounce on the New York Mercantile Exchange. Earlier, the contract hit an intraday high of $911 an ounce.

"Clear expectations that the Fed will cut once again next week, and keep cutting until some further signs of progress emerge, continue to fuel the precious metals," said Jon Nadler, an analyst at Kitco Bullion Dealers, in a research note.

"An important resistance area at and around $900 was being probed this morning and was successfully accomplished," Nadler said.

On Wednesday, gold futures dropped $7.20 to end at $883.10 in a very volatile trading session.

"Given the turmoil across the financial markets, it's not surprising to see the precious metals remain extremely volatile as some investors cash in their positions to generate cash while others will look favorably upon gold as a safe-haven asset," said James Moore, a metals analyst at TheBullionDesk.com, in a research note.

Moore pegged technical support at $876 to $868 while resistance is expected at $890 to $900.

Peter Grandich, editor of The Grandich Letter, said: "Despite an onslaught of bearish forecasts and attempts to cap the market, gold continues to demonstrate it remains in a secular bull market. $1,000 is not a question of if, but when."

On the currency markets, the dollar was down against most major counterparts, pressured by weaker-than-expected existing-home sales data. See Currencies.

The dollar index, which tracks the performance of the greenback against six other major currencies, dropped 0.9% at 75.685. Dollar weakness typically boosts gold prices.

Also on Nymex, other metals prices rose sharply. March silver soared 36.30 cents to end at $16.333 an ounce and March copper rose 9.95 cents, or nearly 4%, to $3.1715 a pound.

On Wall Street, U.S. stocks reclaimed higher ground for a second day after a taxpayer rebate plan was unveiled by the White House and the House leadership, lifting an equities market recently battered by worries of an economic recession. See Market Snapshot.

Crude-oil futures rose for the first time in three sessions, moving up nearly 3%, as government data showed U.S. crude inventories increased by 2.3 million barrels last week. See Futures Movers.

Metals stocks surge

MY $250,000 STOCK PORTFOLIO IS DOWN 18% FROM THE TOP, BUT I AM STILL AHEAD FOR THE 12 MONTHS, WHAT DO I DO NOW?

This was a question asked last night at our Monday "orientation meeting" at Manana's.

Here's what I suggest:

Sell out your portfolio on the rally that should take place later this week, or early next. Put $50,000 in the "ING" money market account paying 4%, and have them send you a check for $3,000 a month. When depleted, tap into the program mentioned below"

• Put $100,000 in gold coins, see the blog for where to buy them (singlesinvestmentclub.com). Buy $25,000 now, if gold goes lower, buy $50,000, and top it off if it goes lower, with the remaining $25,000. Then stay put.
  

• Put $100,000 into the "safety net" program. $12,500 into Precious metals sub account and, $12,500,into Natural Resources now.
  

• On a market dip, do the same, but with $50,000, and then top off (using the same percentages) with the remaining $25,000. I will do this all for you, and assist you going forward. Don't forget, you receive a 7% up front bonus when you enter the safety net program before January 25th; 6.5% thereafter. (see prospectus for details).
  

See blog for why Jim Sinclair thinks gold will rise. His record is perfect, and he predicts gold to rise to $2,200 within 18 months.

Historically, precious metals sub accounts (mutual funds rise anywhere from 5 to 10 times the speed of the metal itself (this would be our performance engine).

I'm sure many of you are in the same boat, hopes this helps,

John

WE MADE IT THROUGH TODAY (TUESDAY) THANKS TO THE FED DROPPING RATES BY .75%

Around 3 AM, I was up watching the stock markets of the world all but collapse. CNBC commentators were predicting that the Dow Jones Industrial Average would fall 1,000 point on the opening. I advised clients to wait til 11 AM (EST) to lighten up their portfolios.

8 AM (EST) came around, and an announcement that the Fed had just lowered interest rates 3/4 of 1%, which calmed U.S. Investors. The market did open down almost 500 pts, but managed to rally back to only a 100+ pt loss.

This interest rate bought us time to get completely out of the market, with the exception of precious metal and natural resource mutual funds (our safety net program). Even our timely investments took a 7% hit while the general market was down 18% over the past few weeks.

We do expect a stock market rally to take place sometime in the near future, and that would be a good time to lighten up your positions, even some natural resouces (because if we have a slow-down, oil will be in excess, causing oil stocks to fall a bit).

More tomorrow, "as Wall Street turns".

John

JIM SINCLAIR COMMENTARY - WHY YOU SHOULD BUY GOLD, AND WHEN?

Our Club advisor this morning (Tuesday) commented on gold (how it may react, and when to buy). Peter Grandich mentioned that gold could fall $50 from here (the risk), but could easily rise $300 within a few months or less (the reward). So get ready, and start nibbling for those that are "gold naked".

Below is a commentary from the "Jim Sinclair" site (today's). Jim got us into gold at $200 in 1979, then out in 1980 at $850. Then back in, in 2003 at $275, and is now predicting gold to be $1,000 within months, and the next stop will be $1,600, followed by a rise to $2,200 by late 2009. He's got a perfect record, so let's follow him.

Suggest you buy your gold on a dip from here using ICA Corp (Don McAlvany's company in Denver), the 10th largest gold dealer. Tell Rob McLaughlin that you are part of our investment club group in Maui. His number is: 800 525 9556, Ext. 101.

Here's Jim Sinclair's site commentary:

Market Commentary From Monty Guild      Author: Monty Guild and Tony Danaher

MAY WE SUGGEST A FEW OPTIONS? Markets are queasy all over the globe but there is no reason for us to be losing sleep and feeling unsettled.  There are many options to protect you from the global bear market in stocks.  May we suggest a few options?   BUY ON DIPS A) GOLD As we have written for months now, inflation is becoming a worldwide problem.  We do not believe in the traditional U.S. centric wisdom that as the U.S. economy slows, U.S. and world inflation will moderate.  In our opinion (and based upon a great deal of research by ourselves and others), inflation will rise for several reasons. They are: The money supply globally has been growing very rapidly for at least the last 2 years. Inflation has been held in check in the developed world by lower cost imports from the developing world replacing high priced manufactured goods.  This cycle has now ended.  Manufactured goods are rising in price, especially in the developed countries due to a rise in costs in the manufacturing countries and the lower U.S. dollar. Every solution currently being employed and/or contemplated to solve the current world’s financial woes (especially, the so called subprime crisis) will breed inflation in the longer term, and cause the rate of inflation to accelerate.  I could waste a lot of your time going into this in detail, but I realize that I may already wearing out my welcome by mentioning these points so frequently. Historically, inflation has continued to rise for at least a year after the economy turns and begins experiencing a recession.  Does this mean inflation combined with economic recession, or stagflation, is in our future for at least a year?  I am afraid that it does. The question of will the U.S. dollar’s decline continue to feed inflation remains to be seen.  I certainly hope that the powers that be in the U.S. have realized the unwise nature of the weak dollar policy.  Soon the U.S. should start to do more to strengthen the dollar.  Of course, this will have to wait until the Fed stops lowering rates to solve the financial crisis, but taking a strong dollar policy is essential.

OAHU MEMBERS, PLEASE JOIN OUR MAUI INVESTMENT CLUB

Until we can get more interested parties to join the "oahu singles investment club", it is suggested that you purchase your safety net club program, and then attend Maui meetings or just manage your portfolio using this club "blog". It is anticipated that the Oahu club will be up and running in about 3 months. To purchase your $1,000 safety net program, give me a call at 214 5082, and I'll get you out an application.

If you wish to buy gold or silver coins, this is the time to do so. Please call Rob McGlocklin at 800-525 9556, Ext. 101 (ICA Corp, the 10th largest gold dealer in the nation. Great folks, very ethical, good prices.

Thanks, stay tuned, and we hope to see you all again soon,

John (Club financial moderator)

WHERE TO BUY PHYSICAL GOLD (gold & silver coins)?

I buy my precious metals from:

ICA (Don McAlvany & Co.)

800-525 9556, Extension: 101

Ask for Rob McLaughlin, and tell him that John Miller, from the Hawaiian investment club sent you.

While the minimum is $5,000, in some cases they will accept less. The coins are sent to you via insured mail (received in 3 days or less). Excellent service. Great folks.

Watch for my buy signal, and then take the plunge, good luck, this is just the beginning of the move.

John

WHAT INVESTMENT SUB ACCOUNTS LOOK GOOD NOW!

Still:

Precious metals

Natural Resources