Money Talk

I have not had much news to celebrate about the US economy inspite of the 6 continuous weeks of stock rally that pulled the US Stock Market up by about 22%, atleast that's what Dave Ramsey said in today's live TV program at 8pm EST watched by an estimated 1 million people. Check out http://www.townhallforhope.com/. Great communicator that Dave Ramsey is, he is a fiscal conservative and a practical Christian. He is just a great package. I travelled 25 miles to listen to this telecast. If you listen the same talk online, you may agree that he drives home a powerful message of the example of how he wants people to be like baby eagles who need to flap their wings hard when pushed from a nest (when the going gets hard). That he says is akin to realizing your hidden potential when you work hard in a difficult situation.

http://krugman.blogs.nytimes.com/

Did you know the once touted Carbon Cap and trade concept has lost more than 50% of its value in investments on carbon credits. What went wrong? Its lack of clarity in policy. Many people hopped onto this bandwagon thinking it would be a 10-bagger in less than a couple of years only to realize that they have lost more than 50% or more in that many years. I am thinking this concept will catch up only when all countries sign the Kyoto accord on climate change. America hasn't and is not showing signs of signing in the near future. So its difficult to see it would succeed as a profitable investment as of now.

There is a short term negative correlation of stocks to house prices which normally never exists. But why is it so now? Well, home values can't go up unless the unsold house inventories come down and inventories can't go down enough because of one major reason - Growing Unemployment. As for stock prices, they are on the so called 'bear market rally' but what surprised many was its month-long strength. That should tell something, and in my view its signaling the bottom which many are waiting for. This housing-stock market disconnect seems to be a new phenomenon yet to be named and I want to call it the "Jason Effect" named after its discoverer "me"! How about that. I would be a buyer at any pullbacks, but I am lucky that a bucket of my stocks I bought between Dec 2008 and Feb 2009 are up a handsome 38% and some even above 50%. I expect the trend would continue albeit gradually. I hope for a high percentage return going forward 6-12 months.