The Actual Smartest Guys in the Room

Long term cycles bottoming soon?

2009-02-04T05:20:00.000-08:00

CNBC: Nenner Cycle Signals Entry Point.

You must also watch the Bloomberg video at his site to understand his full picture though.

See top video link here:

http://www.charlesnenner.com

Charles Nenner on Bloomberg.

2008-10-31T03:23:00.000-07:00

When you listen to this interview, you'll perhaps think this guy is nuts for suggesting he has developed a program that can predict markets up to roughly 30 years in advance. Perhaps he is (perhaps we all are.. I digress..), but his calls tend to be accurate. Kind of frighteningly accurate, actually.

In this Bloomberg TV interview, Mr. Nenner is predicting the stock market will hit a cycle low towards the end of November, which then opens up a longer term buying opportunity.

Bloomberg: Charles Nenner Sees Opportunity in Commodity Stocks: Video.

Note: To view the video, click on the link towards the right side, under the heading "Related Video and Graphics".

Buffett Dives In.

2008-10-17T05:14:00.000-07:00

CNBC: Warren Buffett: Why I'm Buying U.S. Stocks Now.

New York Times: Buy American. I Am.

The latest from Charles Nenner.

2008-10-05T05:00:00.000-07:00

I couldn't find this appearance on Fox, but I've found it on Charles Nenner's site. He's had some very good market calls, including one late last year where he called for a rough 2008, and he's also had some questionable calls, including a call in April of this year that we might have hit the market low for the year. [You can see more detail on his calls as well as a bit on his methodology if you check out the prior posts I have linked above.]

Now he's saying we should see the market low around October 14 or 15th, and then the cycle should turn, and then stocks move up into May 2009. But he does also point out that if we have a break of the current market lows, then things have the potential to head much lower.

CharlesNenner.com see Fox News video at the top.

Heebner Goes Financial!

2008-09-19T19:48:00.000-07:00

This sounds almost as wacky as going postal, but he has a knack for being right on sectors, and this sector has been pounded nearly into the floor.

CNBC: Making Sense of the Markets.

Yamada on gold and the dollar.

2008-08-18T19:02:00.000-07:00

CNBC: Getting Technical.

Chart watcher Louise Yamada suggesting you watch for stabilization in the gold price trend, rather than jumping in right now.

Talking Commodities.

2008-08-07T18:58:00.000-07:00

CNBC: Talking Commodities.

Jordan Kotick of Barclays Capital runs through an interesting longer term chart on the CRB index, as well as some charts of selective commodity linked currencies and stock markets.

VLMAP.

2008-07-22T04:08:00.000-07:00

MarketWatch: Reading the VLMAP.

Quotes:

A valuation indicator maintained by Value Line, Inc. rose to the 100 level that marked the last three significant stock market bottoms.

Those were the bottoms in October 2002 and March 2003, and the panic low immediately following the 9/11 terrorist attacks.

What is this indicator from Value Line? It is a single number, representing the median of the projections made by Value Line's analysts of where the 1,700 stocks they closely follow will be trading in three to five years' time. Followers refer to this number as the VLMAP, which stands for Value Line's Median Appreciation Potential.

Peering out of the mist.

2008-06-19T05:28:00.000-07:00

By the way, 'mist' is German for '&^%$'. [Poop as my son would say.]

Bloomberg: Paulson & Co. Says Writedowns May Reach $1.3 Trillion.

Quotes:

`$10 Trillion Opportunity'

Paulson's speech was the biggest draw at the event, which comes as the hedge fund industry endures some of its worst performance in nearly two decades, rising just 0.13 percent through May, according to Chicago-based Hedge Fund Research Inc.

``John Paulson has of course been very successful by making the right trade last year,'' said Manuel Echeverria, chief investment officer of Optimal Investment Services SA, a Geneva based investor with about $10 billion under management. ``We'll have to see what he's going to do now that the trade has run out of juice.''

Paulson said he's preparing to buy distressed securities such as bank loans, call them a ``potentially $10 trillion opportunity.'' While it is still ``premature'' to invest in many of them, he sees ``opportunities this year'' to buy mortgage backed debt, he said.

He hired employees this year to research securities firms such as Citigroup Inc. for long-term investment positions. ``We're trying to see the right entrance point,'' he said. ``If you invest too early, you lose money.''

Be Bullish.

2008-04-16T20:07:00.000-07:00

BusinessWeek: Stocks: Why the Bottom May Be in Sight.

Quotes:

Steven Leuthold, founder of Leuthold Weeden Capital Management, is widely considered by his Wall Street peers to be among the more astute market historians and independent thinkers.

....

Q: When might stocks rebound?

A: If the recession runs 16 months—that would be a long one—then based on the usual relationship of market bottoms in a bear market, the stock market bottom would be in August. If it's an 11-month recession, we would see a market bottom in May or June.

Charles Nenner on CNBC.

2008-04-08T08:21:00.000-07:00

Charles Nenner is back with more predictions. Let's hope he's right, because he's generally positive now. You can review his earlier call on 2008 here.

Predictions:

We may have seen the low on the Dow for the year.

Expects some volatility still going forward.

Second half of April should be good.

The month of May could be bit of trouble again.

By the end of year, we should be back to the highs made last year.

Thinks energy stocks and the emerging markets could be the place to be.

CNBC: Oracle of Eyes.

The Great Debt Robbery.

2008-04-08T08:04:00.001-07:00

Out of crisis ultimately comes opportunity. Generally speaking, not always.

So, cautiously, in small chunks, slowly and steadily, I'm putting money in a high yield fund over the next 12 - 18 months.

MarketWatch: Richards: 'Great' era for distressed-debt investing.

Quotes:

Bruce Richards, chief executive of $12 billion hedge fund firm Marathon Asset Management, said on Monday that a "great" era of distressed debt investing is coming very soon as hundreds of companies file for bankruptcy.
Some of the best opportunities are in the mortgage market, where struggling regional banks are trying to sell troubled home loans, he added.

"This is the great distressed debt era," Richards said during a speech at a hedge fund conference organized by Institutional Investor in San Francisco. "It's the single best investment opportunity in 17 years."

Distressed debt investors like Richards buy bonds and other securities of troubled businesses in the hope of selling at a big profit later when the companies either recover or reorganize in bankruptcy.

Some hedge-fund investors say distressed debt will generate strong returns in coming years as the credit crunch triggers more corporate bankruptcies, creating a wealth of new opportunities.

Richards said on Monday that his firm is monitoring 150 to 200 companies that will likely file for bankruptcy protection from creditors over the next 12 to 18 months. The default rate on high-yield debt will likely jump to 8% in the next year, he added.

Jim Rogers Gone Wild.

2008-02-29T07:07:00.000-08:00

He's getting a little too rabid for me on the anti-US thing and his criticism of Ben Bernanke is over the top [if only he'd unleashed these tirades as publicly and loudly against Greenspan, who boxed us into this corner in the first place] but his call on agricultural commodities and selective other commodities strikes me as right.

[My aside on the US:
Obviously, the major boom type growth now is in other places (Brazil, India, China, etc), and you have to expose yourself to their growth via your investments, but I rather enjoy the US, trust it's open and free society more than any other, continue to believe that it will offer opportunity, and my kid will do just fine learning English, thank you very much. And personally, I think all currencies are flawed; it's just relative, and in the timing.]

TimesOnline: Quantum's Jim Rogers says US 'out of control'.

Quotes:

Jim Rogers - who co-founded the now closed Quantum Fund with George Soros - told 750 global fund managers in Tokyo today that, America is “completely out of control”, there will be a 20-year bull market in commodities and that prices will be in turmoil.

And he also warned that it “made sense” if global competition for resources ended in armed conflict.

Mr Rogers told delegates to the CLSA investment forum that the prices of all agricultural products would “explode” in coming years and that the price of gold, which hit an all-time high of $964 an ounce yesterday, will continue its surge to as much as $3,500 an ounce.

....

In a blistering attack on US monetary policy and the “helicopter cash drop” responses of the Federal Reserve, Mr Rogers described the American dollar as a “terribly flawed currency”.

He said that the plan by Ben Bernanke, the Fed Chairman, to “crank up the money-printing machines and run them until we run out of trees” had exposed America’s weakest point to her rivals and enemies.

The dollar may have declined recently, he added, “but you ain’t seen nothing yet”.

Talking to a room almost exclusively populated with Japan-focused equity investors, Mr Rogers recommended an immediate language course in Mandarin and a switch into commodities — the second-biggest market in the world behind foreign exchange.

Mr Rogers said that historic drains on wheat, corn and other soft commodity inventories have created market dynamics that could lead to severe food shortages.

The outlook over the next two decades would see prices of everything from cotton and sugar to lead and nickel “going through the roof”.

Attention K-Mart Shoppers.

2008-01-31T05:43:00.000-08:00

A blue light special coming on homebuilders, financials, retailers, etc, near you. Wait for it though.

MarketWatch: Scion Capital shuts Asian funds to focus on U.S.

Quotes:

Scion Capital LLC, a $1 billion hedge fund firm run by Michael Burry, is shutting its Asian funds to focus on opportunities that will be created by a U.S. economic slowdown.

....

The Asian funds aren't being forced to close by client redemptions or other pressures, Burry noted. Investors can put the proceeds from the liquidation of the Asian funds into Scion's main global funds, he added in the letter.
"The primary motivation for this move is that I foresee a significant opportunity to invest in dramatically undervalued distressed assets and out-of-favor businesses over the next several years," Burry wrote.

"The sheer magnitude of the troubles facing the leading companies in what is still the world's largest and most significant economy cannot be missed," he explained. "The global credit bubble has burst, and the world has not yet learned the full impact."

Scion was one of the first hedge funds to spot problems in the subprime mortgage market in 2005. When the credit crisis erupted last year, Scion's main Value funds generated returns of more than 130%, after fees, as bets against riskier parts of subprime mortgage-backed securities paid off. Since the funds started in 2000, they have more than quintupled.

....

"With equities amounting to roughly one-third of assets, the Funds are awaiting not only the birth of opportunities, but the recognition of such opportunities by me," he wrote. "I patiently await a deepening of the U.S. recession and the string of bankruptcies that are sure to follow."

Charles Nenner on CNBC: 2008 to be a bad one.

2007-12-06T08:55:00.000-08:00

Charles Nenner appearing on CNBC earlier today.

No video to link to yet, but a quick summary:

- His system is based on economic cycles, complex mathematical equations, and determinism, which is to say he believes that he has a system he believes can predict the trends and price points in various markets in advance. This sounds crazy, except he has been remarkably (frighteningly?) accurate in some of his predictions.

- Right now, he is calling for a year end rally, with more to go, roughly to mid-Dec. His price target on the Dow is around 14,300.

- In terms of 2008, he predicts a tough February and March, and a very volatile year overall, with 3 to 4 roughly 15% corrections. He believes 2008 will be a very difficult year to make money in.

- He believes we are right on the edge of a deflation scare.

Video is now available:

CNBC: Market Predictions.

Who's buying now?

2007-12-04T05:53:00.000-08:00

Jim Rogers saying too many people are bearish on the dollar, and when a trade gets this one sided, it's likely to rally.

CNBC: Who's Buying the Dollar?

The Big Housing Chill.

2007-09-18T17:14:00.000-07:00

Robert Shiller, Yale economics professor, called both the Internet bubble and then the housing bubble. Now he believes that in areas of the U.S. that had serious booms, housing prices could fall up to 50% in real inflation corrected terms over a period of several years. He also welcomed the Fed lowering their benchmark short term interest rates today as he believes there are increasing signs of recession. More in the video below.

CNBC Video: Housing Outlook.

Louise Yamada on gold.

2007-09-12T17:59:00.000-07:00

Gold is looking good technically, according to Louise Yamada of Louise Yamada Technical Research Advisors. We're in a long term secular bull market from a break out of $300, the bull market could last up to a decade or two, and the recent technicals have been excellent. Next stops: $750, $830 or $900 and we should now see support at $690.

CNBC Video: Gold Reaching New Highs.

US Housing Bubble imploding? Buy China.

2007-08-03T06:14:00.000-07:00

Bloomberg: U.S. Housing Is Among `Biggest Bubbles,' Rogers.

Quotes:

China is a market that Rogers isn't selling even as the fallout from subprime drag on share prices worldwide, he said. He's sold his other emerging market holdings as stock gains outstripped the prospect for earnings, Rogers added.

``China's the next great country in the world and we must learn about investing in China, because that's where fantastic fortunes are going to be made in the next century,'' Rogers said. ``I would be looking at China very carefully.''

---------------------------------------------

Bloomberg Video: Jim Rogers on China.

---------------------------------------------
I suggest dollar cost averaging via Matthews Asian Funds or maybe the T. Rowe Price New Asia Fund, but note that the T. Rowe Price fund has money spread around Asia, with China making up roughly 30%.

Charles Nenner on CNBC.

2007-04-13T12:36:00.000-07:00

CNBC Video: Portfolio Prophet.

[Note: CNBC videos are available for 24 hours. You can move videos on Charles Nenner on his site.]

Charles Nenner of Cycle Forecaster made another appearance on CNBC this morning. He brought along a couple of charts, including one of sunspot activity and the Dow Jones Industrial Average which shows a connection between increased sunspot activity and better market returns, the underlying theory being that magnetic fields thrown off from the sunspots influence human activity. This indicator suggests a stock market correction at the end of 2007 into 2008, then a market rise into 2013 (Yippie!). A second chart shows the relation between lumber and housing, and suggests the housing market will be weak into 2010.

While watching the sunspot part, I pondered the idea of using the sunspot indicator on a longer term basis, and then using the moon phase indicator for shorter term trades.

Steinhardt's gut flashes caution.

2007-02-18T06:00:00.000-08:00

In July of last year former hedge fund manager Michael Steinhardt was interviewed on Bloomberg. His basic stance at the time was bullish on the US and the stock market at a time when a number of others were turning bearish. Mr. Steinhardt's call turned out to be the right one. Now, however, he's turning cautious.

Why do I refer to his gut, by the way? I read his autobiography a number of years ago, and though it was refreshingly candid on some less savory facts of his life (his father was a gambler and basically a bit of a crook; Mr. Steinhardt himself was a profoundly unpleasant boss) it explained little about his investment style. I came away with the idea (and perhaps I need to re-read it) that he made most of his major calls based mostly on solid gut instincts. Obviously, it's not quite that simple, as you also have to keep abreast of the news, major trends, have a streak of contrarian in you, and a good sense for timing.

Bloomberg: Steinhardt Is `Very Sensitive' to Signs Rally May End.

Quotes:

Michael Steinhardt, the investment pioneer whose hedge funds returned more than 20 percent a year for almost three decades, says the bull market in U.S. stocks may be coming to an end after more than four years.

``Very few people have the ability to pick a high, and I don't think that this is the exact moment,'' Steinhardt, 66, said in an interview yesterday in New York. ``One stays long, but one becomes very sensitive. You say to yourself that the next major, major move is going the other way.''

Steinhardt said some investors were using too much debt to boost returns, and the dollar may get support from a decline in the U.S. budget deficit. Fortress Investment Group LLC's initial share sale last week, the first by a U.S. manager of private- equity and hedge funds, showed its founders were ``clever in terms of their timing,'' he said.

The Dow Jones Industrial Average closed at a record high of 12,741.86 yesterday after Federal Reserve Chairman Ben S. Bernanke said inflation pressures were beginning to ease because of falling energy and commodity prices. The Standard & Poor's 500 Index, completing its best two-day advance since Sept. 26, has returned 16 percent in the past year. Bullishness on stocks is at a 10-month high, according to a Merrill Lynch & Co. survey of fund managers released yesterday.

`Loosened Rules'

Still, Steinhardt sees greater risks now than in the past from the potential for stocks to decline ``in a meaningful way,'' defined as by 10 percent or more.

``Coming back to the area where the excess might be, I think it's in leveraged investments,'' including commodities and real estate, he said. ``The rules related to borrowing money have loosened up extraordinarily. This is something we should remember.''

Rule #1 Highlights Apple.

2007-02-06T19:44:00.000-08:00

I'm personally liking Apple (AAPL) a lot right here at $84, and I'm happy to see it meets the Rule #1 rules as well.

Rule #1 Blog: Rule #1 Question of the Week: What About Apple?

If you're looking for a book on stock picking, Phil Town's Rule #1, The Simple Strategy for Successful Investing is one I highly recommend.

Jim Rogers loves China, commodities; hates dollar, bonds..

2006-12-13T06:28:00.000-08:00

And probably the guys from Refco. I digress.

Via Bloomberg, a half hour lecture from London by Jim Rogers where he expounds on his big picture views of the investment world going forward. As mentioned, he loves China, calling them probably the world's best capitalists, and believes we are only roughly half way through a long boom in commodities. On the flipside he does not have a favorable view of the dollar, stocks in general, nor is he fond of bonds.

Bloomberg Video: Jim Rogers in London.

[Requires Windows Media Player.]

Louise Yamada: Gold going to $3000.

2006-12-11T05:37:00.000-08:00

I did a double take when I read that prediction from Louise Yamada. If you're not familiar with who she is, she was a long time technical analyst at Smith Barney who eventually rose to run the Technical Research department there. Citibank decided to shut the operation down a few years ago, and she formed her own company; you can read more of her bio here.

I highlight some interesting bits from this article, but if you're interested in gold, take the time to read the whole thing.

Bloomberg: Gold Is Cheap, Yamada, Banks Assert as Sales Pared.

Quotes:

Just because gold is down 14 percent from its high of $732 an ounce on May 12, doesn't mean the rally that began six years ago is coming to an end anytime soon.

The swooning U.S. dollar, which has become a proxy for the slowing American economy and the nation's humiliating lack of success arranging regime change in Iraq, banning weapons of mass destruction in North Korea and Iran and reducing its trade and budget deficits, is making gold Wall Street's darling again for 2007.

``Gold is the purest play against the dollar,'' said Louise Yamada, managing director of Yamada Technical Research Advisors LLC in New York, who sees gold surpassing $730 next year on its way to $3,000 within a decade. Yamada, the former head of technical research at Citigroup Inc., proclaimed gold cheap in 2001 when it fetched $279.

She now has lots of company among the world's biggest financial institutions. Deutsche Bank AG's chief metals economist, Peter Richardson, made gold his favorite pick for 2007. JPMorgan Chase & Co. analysts John Normand and Jon Bergtheil on Dec. 7 said only corn could rival gold as the best bet while Merrill Lynch & Co. analyst Michael Jalonen elevated gold's value through 2010.

``If you can only make one commodity investment,'' gold is the ``choice for 2007,'' said Richardson from his office in Melbourne.

That's partly because five of the past six bear markets for the dollar led to an increase in gold.
....

To be sure, there are enough skeptics to make the betting on gold controversial.

``It's rare that an asset outperforms others consistently year on year,'' said Andrew Kinsey at Johannesburg-based Craton Capital, whose $267 million precious-metals fund rose 51 percent this year. ``The dollar-gold relationship may break down next year. Geopolitical risks and energy prices could rise to the forefront and impact gold more than the value of the dollar.''

The U.S. dollar will rebound in 2007, said Joe Prendergast, global head of currency strategy at Credit Suisse in London, during a recent radio interview with ``Bloomberg on the Economy with Tom Keene.'' He predicts a 3 percent appreciation for the dollar by December 2007.

Some analysts say the current consensus that predicts no end to the dollar's weakness is wrong. ``The dollar is completely undervalued,'' said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures Ltd. in Tokyo. ``Metal prices are hitting the tops. This month and next January, base and precious metals prices will go down.''

Liz Ann Sonders explains her 50/50 odds of recession call.

2006-09-10T17:12:00.000-07:00

CNBC via MSN Video: Charles Schwab Chief Investment Strategist Liz Ann Sonders.

Though this is a bold call right now, I find it hard to argue with her logic. Unfortunately, she makes a pretty good case for this.

I think her caution is warranted.

Robert Schiller on Housing.

2006-09-08T19:22:00.000-07:00

Robert Schiller, an economics professor at Yale, authored a convincing, prophetic, and quite timely book in 2000 called "Irrational Exuberance" which warned readers of an unsustainable bubble that had developed in the stock market. Shortly thereafter, that bubble popped quite spectacularly.

Mr. Schiller has been warning of the possibilities of a bubble in the housing market, and when a second edition of the aforementioned book was issued in 2005, he updated it with his thoughts on housing. [I highly recommend the book, by the way, despite the fact that it might appear dated, as his insights are timeless.] Today he was interviewed on Bloomberg Radio on his current views on the housing market, which is now showing various signs of stress.

Listening to this interview, it's clear that Mr. Schiller is no Ravi Batra (thankfully!) seeing an economic disaster around every corner. Mr. Schiller instead sounds rather even keeled, and believes modest declines in housing prices over time are more likely than an end of the world scenario. Responding to a question, he downplays what he identifies as the worst case scenarios, a world wide recession or a Japan style deflation, though he does not completely rule them out. He does express his faith that the Fed will do it's best to lead us through this period.

That said, if you read Mr. Schiller's writing on housing, whether in his updated book or in recent articles, you will note that valuations are far enough ahead of long term averages that any adjustment, whether in terms of a quick movement in price or a longer duration change, has the potential to be quite interesting.

Bloomberg Radio: Robert Schiller.

(requires Microsoft Media Player)

Charles Nenner - Wait till 07.

2006-08-07T18:11:00.000-07:00

The man with the hot hand in market predictions right now is Charles Nenner of Cycle Forecaster. I don't know a lot about his system, I believe it's a combination of more complicated technical analysis and fractals, but he has been making predictions lately that turn out to be correct - and pretty much to the day.

Here's an interview with him from CNBC with a number of his predictions and charts, including a prediction that the stock market will have a solid year in 2007, but not such a great rest of 2006. Also of note, his analysis indicates that interest rates have peaked and will head down for the next couple of years.

CNBC Video: Cycle Forecaster Founder Charles Nenner.

For a little more background read "About Cycle Forecaster and Charles Nenner". [pdf]

Also available is this earlier interview:

Charles Nenner on CNBC on June 26, 2006.

Steinhardt says US Market "Ok".

2006-07-11T19:53:00.000-07:00

Off the top of my head I can think of 3 well respected former hedge fund managers who are rather bearish on the US [Soros, Rogers, and Robertson], so it's an interesting contrast to listen to Michael Steinhardt and his view that the US stock market is actually "ok", that the US economy is "just fine", and that he thinks things are going to actually get better, not worse.

Bloomberg TV: Michael Steinhardt.

My little China stock.

2006-05-09T10:50:00.000-07:00

Wayne Rogers, aka Trapper John of M*A*S*H the TV show, runs his own investment firm and appears on Fox News' Cashin' In show. I don't know what his investment record is, but his views are always well informed and intelligent, and his calls have generally done quite well. This weekend he gave a little insight into his views on China, and a stock pick.

FoxNews Cashin' In Recap May 6:

Quotes:

Wayne says: China Unicom (CHU)
Friday's close: $9.70
52-wk High: $9.70
52-wk Low: $7.42
YTD Return: +20.3 percent

Wayne Rogers: Mine is China Unicom. I'm going back to China again, if you will, because I think that China Unicom, which has 34 percent of the cellular business. It’s growing constantly. China is going to grow and this will grow along with China. They reported better earnings since last year. The stock is moving up. It's a good stock, good company, solid, if you believe in China, you have to believe in this.

....

Money Mail

Question: "China and oil are hot, so how does China Petroleum & Chemical Corp. (SNP) look?"

Terry Keenan: Wayne, what do you think? The Chinese economy has grown at 10 percent, despite the naysayers.

Wayne Rogers, Wayne Rogers & Company: I just talked about recommending a Chinese stock, CHU. I owned PetroChina (PTR) and I love all of those stocks. I've said a million times on this program that they are going to be the biggest capitalist country in the world if they maintain their political equilibrium. They are smart and they'll work hard.

Gold is.... gold.

2006-04-30T15:39:00.000-07:00

Wow. These are big predictions and come from smart investors who have made good calls before. I'd note that these guys are making the case that gold goes higher due to it's relation to other things - for Faber it's the US Fed printing dollars, for Leeb it's gold in relation to oil, for Jim Rogers it's part of the overall commodities bull market.

Bloomberg: Marc Faber Says Gold May Rise 10-Fold If Dow Triples.

The New York Sun: $2,500 an Ounce Gold Coming Soon, Adviser Says. [Stephen Leeb]

Bloomberg: Jim Rogers Says Gold Will Reach $1,000 as Commodity Prices Soar.

Not your father's emerging markets.

2006-04-10T17:34:00.000-07:00

Mohamed A. El-Erian is the new manager of Harvard's investments. He came to Harvard from PIMCO, where he had a great performance record running their emerging market bond portfolio. I find the hiring of an emerging markets manager for a general investment fund to be quite telling. But the guy's pretty bright too.

Interviewed on CNBC a few weeks back, Mr. El-Erian observed on emerging markets in general:

"It's different this time around. When I said this 3 or 4 years ago, I think people thought I was a little bit crazy. And now people have bought in to the fact that this is secular process, this is a long term migration up the quality curve. There's lots of reasons why it's happening. It has to do with what the countries themselves are doing in terms of better policies, it has to do with the external environment, they are selling the right stuff at the right time."

He likes in Latin America: Brazil, Chile, Mexico.

He's worried about: Venezuela, Ecuador, Argentina.

On China:

"One of the themes that has been very successful in investing, is make sure you're investing in a set of risks that are complementary to China, that are clients of China, that are not competing with China. The reasons why is that China right now has embarked into a truly secular long term growth process, which means that it's demanding things it can't produce. So as long as you can feed into this production and consumption chain, you have a tremendous tail wind for your investment. So anything that complements China, as opposed to competes with China, is a good thing."

Interesting.. I'm thinking BHP and maybe EWA.

Gaming sectors.

2006-03-26T19:48:00.000-08:00

I am a big proponent of sector based investing, and I am always happy to see articles on the subject.

I think this one is worthy of your time:

MSN Money: Spot the next hot sector before it lifts off.

Communications is the #1 sector in this screen, and it's interesting to note that the various communications sectors also came up in Sam Stovall's Top 10 sectors from January play. It's also happens to be doing very well so far this year.

Like on Dallas, It Was All Just A Dream.

2006-03-14T19:20:00.000-08:00

An interesting chart showing a long term perspective of the S&P 500. If you ignore the bubble of the late 90's, it turns out we're right back on the longer term uptrend of the past 20 years.

US Market Blog: A Twenty Year Secular Bull Run.

Interesting times.

2006-01-15T19:39:00.000-08:00

A year ago, Jim Rogers was hot on China, but recommended waiting for headlines blaring "Crisis in China" before you considered investing your money there.

We may be drawing closer to that moment.

Los Angeles Times: A Home Boom Busts.

Quotes:

SHANGHAI — American homeowners wondering what follows a housing bubble can look to China's largest city.

Once one of the hottest markets in the world, sales of homes have virtually halted in some areas of Shanghai, prompting developers to slash prices and real estate brokerages to shutter thousands of offices.

For the first time, homeowners here are learning what it means to have an upside-down mortgage — when the value of a home falls below the amount of debt on the property. Recent home buyers are suing to get their money back. Banks are fretting about a wave of default loans.

"The entire industry is scaling back," said Mu Wijie, a regional manager at Century 21 China, who estimated that 3,000 brokerage offices had closed since spring. Real estate agents, whose phones wouldn't stop ringing a year ago, say their incomes have plunged by two-thirds.

Shanghai's housing slump is only going to worsen and imperil a significant part of the Chinese economy, says Andy Xie, Morgan Stanley's chief Asia economist in Hong Kong.

Although the city's 20 million residents represent less than 2% of China's population of 1.3 billion, Xie says, Shanghai accounts for an astounding 20% of the country's property value. About 1 million homes in Shanghai alone — about half the number of housing starts for the entire United States in 2004 — are under construction.

"They'll remain empty for years," Xie said, adding that a jolting comedown also was in store for other Chinese cities with building booms — including Beijing, Chongqing and Chengdu — though other analysts say the problem is largely confined to Shanghai.

It's Africa hot!

2006-01-14T15:44:00.000-08:00

While the title also roughly describes the past week's weather here in the New York area, I was actually referring to what the January barometer might (emphasize 'might') indicate for 2006.

As reported on CNBC by Mary Thompson:

- "Since 1950, the S&P's January performance, up or down, has correlated with its full year performance 44 out of 56 years, or 78.5% of the time."

- "According to The Stock Trader's Almanac, every down January since 1950 preceded a new or extended bear market or a flat market."

- "Some look at the first 5 days of trading as a barometer of the S&P's full year performance. The last 35 up first-5-days for the S&P were followed by full year gains 30 times. That works out to an 85.7% accuracy ratio. The last 21 down first-5-days split, they were followed by 11 up and 10 down years."

- "There is yet another way to play this January barometer. Standard & Poor's Sam Stovall says since 1970 buying an evenly weighted portfolio of January's top 10 performing sectors of the S&P, gives you a very good chance of beating the index for the rest of the year. [Sam Stovall quote: 'If you select the best performing industries for the month of January and hold them from February through end of December, you would significantly outperform the S&P 500, improve your risk adjusted return, and show a frequency of outperformance of about 75%.'] And when the S&P finished the year higher, this portfolio outperformed the index on a historical basis 16.9% to 6.9%."

But before you go too crazy with this, keep in mind that in the past 5 years we've broken all kinds of market truisms.

Have a nice year.

The Amazing Invest-o-Matic.

2006-01-05T20:29:00.000-08:00

Everybody is looking for the Amazing Invest-o-Matic, which is to say a formula that, when followed, will lead to returns consistently above the market averages. And perhaps "The Little Book That Beats the Market" is it.

I haven't read the book yet, but it's on my list. But from what I've read, it sounds very interesting.

Basically, the book suggests applying a contrarian/value screen to the market, looking for companies that are currently very cheap as measured by earnings yield, yet that also have high returns on capital. By buying a diverse group of companies with these characteristics, you diversify your bet. The bet, of course, is that their value will, eventually, be recognized by the market again.

Will the returns from this formula continue to be as outsize in the future? Probably not, as more people follow this formula and drive down the returns. (Say like what happened with Dogs of the Dow..) But as attention fades..

Bankstocks.com: Little Book, Big Returns.

For your consideration.

2006-01-03T18:47:00.000-08:00

I always enjoy reading the list of possible surprises that Doug Kass comes up with. Some of them (say #24) strike me as imminently plausible, others not so. But the main point is not to be right or wrong, but to be thought provoking, and on that one he scores huge as far as I am concerned.

I suggest you read this list once, let it digest a little, then come back in a couple of weeks and read it again.

Doug Kass via thestreet.com: Surprises for 2006.

No Recession in Front of Us.

2005-11-05T03:56:00.000-08:00

Economic Cycle Research Institute managing director Lakshman Achuthan, interviewed by Ron Insana on CNBC, suggesting that ECRI feels there is "no recession in front of us" based on their proprietary leading indicators. While consumer confidence has dropped recently, ECRI's leading indicators continue to hold up. The main negative is that there are signs of future inflation cropping up.

CNBC Video: Political Shocks and the Market.

[The comments on these topics are towards the end of this clip.]

The king of real estate's cashing out.

2005-10-22T13:28:00.000-07:00

CNNMoney: The king of real estate's cashing out.

Quotes:

Tom Barrack, arguably the world's greatest real estate investor, is methodically selling off his U.S. real estate holdings as prices drive the market to nosebleed levels.

He likens the current real estate market to a game of polo.

"I feel totally safe playing polo on a field full of pros," says the bronzed 58-year old. "But when amateurs are all over the field, someone can get killed. They have more guts than brains. They charge after every ball and don't know when to hold back."

It's the same with U.S. real estate right now. "There's too much money chasing too few good deals, with too much debt and too few brains." The amateurs are going to get trampled, he explains, taking seasoned horsemen, who should get off the turf, down with them.

Says Barrack: "That's why I'm getting out."

Investors take heed. Barrack may be an amateur at polo, but when it comes to judging markets, he's the ultimate pro.

Arguably the best real estate investor on the planet, he runs a $245 billion portfolio of trophy assets, from the Raffles hotel chain in Asia to the Aga Khan's former resort in Sardinia to Resorts International, the largest private gaming company in the U.S.

Right now, Barrack's view of the U.S. market couldn't be clearer: It's a great time to sell, and a terrible time to buy.

In fact, he sees signs of the tech bubble mentality in real estate. Too much capital is chasing real estate, he explains, with hedge funds, private equity groups, and rich investors all bidding on the same properties. "They've driven prices to the point where the yields on high-quality properties are like the returns on bonds, around 5 percent or 6 percent," says Barrack. "That's too low."

And he sees the bubble deflating soon. Barrack thinks the catalyst will be a trend few others are talking about, a steep rise in the price of building materials and labor. "Construction costs have spiked 20 percent in the past nine months," he says. The reasons: Shortages of labor and materials like lumber because of the building boom, and increases in the price of oil, needed to produce everything from plastic piping to insulation to shingles.

The slump will show up first in speculative hot spots like Miami and Las Vegas, he says, where condo developers are preselling their projects for what looks like big profits. When they actually build the units over the next year or two, he predicts, they will end up spending more then the units are now selling for.

Michael Price's Value Picks.

2005-09-28T06:04:00.000-07:00

Famed value investor Michael Price appeared on Bloomberg TV this morning and laid out his current list of top stock picks. Mr. Price had a great long term record for unearthing value at the Mutual Series of mutual funds in the 70's and 80's, and now has his own firm, MFP Investors.

His list included:

AIG
Tyco
Sears Holdings
PNC Financial
Marsh & McClennan (though he felt this was 'fully valued' at the moment)

He also highlighted Sony as being inexpensive and having value.

The housing bubble and you.

2005-09-07T19:05:00.000-07:00

If you believe there's a housing bubble, you'll want to read these two articles.

First up, Peter Thiel in "Google, $100 oil, and housing bubbles".

Next up, Bill Gross in "Pimco's Gross: End of bubble is nigh".

Richard Russell bullish?

2005-09-07T19:00:00.000-07:00

I can't believe it either, but it's not April 1 and here's the article from MarketWatch: An inverterate bear turns bullish.

Historical yields vrs current.

2005-07-04T20:21:00.000-07:00

Seeking Alpha has a post on "Evaluating asset classes based on relative yield", with a link to an enlightening chart.

Dan Gross on the Yield Curve.

2005-06-09T21:14:00.000-07:00

Dan Gross for Federal Reserve Chairman!

At least we'll understand him..

Upside-Down Interest Rates
Bad News for the US That is Worse News for the World.

Wastin' away again in cash-ville.

2005-05-01T14:01:00.000-07:00

Warren Buffett has $45 billion in cash, and believes that there is little value in the market right now, but there should be a big opportunity in the next few years.

So what are you doing with your money?

Read more from Berkshire's annual meeting here, including that Buffett and Munger are worried about hedge funds and deficits, their speculations on the possibility of a real estate bubble, and their thoughts on the valuations of drug stocks.

Doom Doom and Doom Report.

2005-05-01T07:18:00.000-07:00

Marc Faber is a member of the Barron's Round Table. Though I don't know his performance record, he's always interesting. He's been nicknamed "Dr. Doom" for his often pessimistic pronouncements, but a large part of successful investing is avoiding losses, and if he can help you do that, he's useful.

He's feeling gloomy [pdf] and thinks that for the next six months cash is the best place to be. His view is that as the US Fed raises it's key rate to possibly 5% to head off rising inflation, consumer spending and corporate profits will suffer. As a result, asset markets in the US will also suffer and this will likely ripple through to other parts of the world, especially since China also appears to be slowing down.

Longer term however, he likes Asia, which has been generally his focus for a while.

Consumers Not a Pretty Picture.

2005-04-23T06:50:00.000-07:00

Some pithy insight from MacroMaven's Stephanie Pomboy in Barron's.

I'm linking to another blogger who covers it nicely. Barron's is subscription only.

Whether this ends with a big splat or merely a whimper, this will likely determine the course of the economy for a number of years to come.

PS. I have to say, the $79 it costs for online access to WSJ and Barron's is worth every penny.

Stephen Leeb's oil indicator.

2005-04-18T04:36:00.000-07:00

In his book "The Oil Factor", Stephen Leeb has a chart showing that a 50 to 100% rise in oil prices year over year has led to a range of performance for the S&P industrials of -11 to +17 over the following 18 months.

When the change in oil prices is >100%, the range for the S&P is -27 to +4.

Looking at what's happened to the market over the past couple of weeks, we may have hit the tipping point somewhere.

Stephen Leeb is scheduled to be on Bloomberg later today, let's see what he has to say.

Dipping back in.

2005-04-18T04:25:00.000-07:00

Banc of America's McManus Raises U.S. Stock, TIPS Allocations.

Maintains stocks at a below average allocation, but believes this "is the best opportunity to invest in stocks in at least a year".

Cash is dead. Long live cash.

2005-04-05T04:09:00.000-07:00

Tom McManus, B of A.

Donald Coxe, BMO/Harris.

Cliffs Notes on Warren Buffett.

2005-03-27T20:22:00.000-08:00

A blog has a nice set of notes from a meeting with Warren Buffett.

Good stuff.

Insiders looking bearish.

2005-03-25T08:39:00.000-08:00

An interesting article from SmartMoney.com, suggesting insiders are signaling a bearish outlook on market, which could endure for 12 to 15 months.

They're particularly bearish on the energy sector.

Radio Silence.

2005-03-20T19:25:00.000-08:00

It's been a while since I've posted, and it's not because I'm ignoring this blog, I just haven't run across anything lately that struck my fancy for this.

I'm focused on energy for myself, but I'm still keeping my eyes and ears open for this one.

Three's a crowd.

2005-03-08T10:24:00.000-08:00

Last weekend on Bob Brinker's Moneytalk show, he seemed to spend a lot of time talking about housing, somewhat hinting at a housing bubble peak.

Maybe he picked this up from Greenspan. Paul McCulley of Pimco talked about it on CNBC also last week.

Sounds like fair warning.

Getting Technical.

2005-03-05T03:43:00.000-08:00

"Getting Technical" is an on-line exclusive available if you subscribe to Barron's on line.

I'm not much of a technical analysis person, but I do find it interesting and use it as a solid adjunct as I try to decipher the markets.

This week insight's is that though on a short term basis we are looking good, the longer term is not looking good particularly for sectors like the banks and tech (i.e. the Nasdaq).

Quotes from Barron's:
"In other words, the market is a lot closer to the end of the road than the beginning, and some areas within it already have peaked."

"As always, it is about risk and reward. Under the current long-term conditions, buying and holding could be a losing proposition."

On the more positive side, the Small Cap S&P 600 had a breakout.

He doesn't mention energy in this update, I suspect because the energy sector is on a moonshoot that probably defies most technical analysis at this point.

Michael Kahn, who writes "Getting Technical" for Barron's, offers a free subscription to his newsletter, and if you're interested in this topic, I would absolutely sign up for it here.

Grant's Pork Belly Observer.

2005-03-04T04:35:00.000-08:00

Jim Grant of Grant's Interest Rate Observer on CNBC the other day with a couple of good quotes:

"Interest rates are the traffic signals of a market economy, they tell us when to stop, when to proceed cautiously, and when to go. Greenspan, in effect, has turned all these traffic signals green, so naturally there is congestion, there have been pile-ups, and I'm afraid there will be many more pile-ups when credit is repriced properly. The salient feature of our capital markets is the pricing out of risk. Credit spreads are tight as never before both in this country and also in Europe, and people have got it into their heads that as long as Allen is on the job, everything will be fine, and they'll know when to get out, and I'm guessing that they won't know, and that things won't be so fine. Certainly a much cleverer man than I, said recently that government securities at these levels are 'return free risk'. And that is the characteristic of this market, and markets worldwide in credit."

In response to a question about whether the rise in the commodities market is for real and how long the cycle might last, Grant responded:

"I do, it's supported both by the decay of our monetary institutions, but also, and perhaps more fundamentally by the rising prosperity and the good things that are happening in the so called developed world. I think it's a long cycle."

Donald Coxe, eh?

2005-03-01T05:00:00.000-08:00

Donald Coxe of Harris on CNBC last week suggested that after a long term dollar secular bull market in 1995-2002, we are just starting a long term secular bear market for the dollar.

In terms of investment ways to play this:

"gold mining stocks, base metal stocks, and of course crude oil moves up faster than the dollar goes down."

"What you need to be invested in is where the fast growth is occurring and where there's pricing power, that's China and India, but you can do that by buying the great mining stocks that are here, so you don't take country risk."

Read more here in Donald Coxe's March commentary.

[I'm more inclined towards the oils myself, but to each his own.]

Extreme Investing.

2005-03-01T02:17:00.000-08:00

Bob Marcin, ex of MAS Value fund and with a very good record, suggesting that the 'mass of stocks in the middle' not a good way to invest these days. He has a few picks, you can read it here.

[I think of the major indexes and I hear that Talking Heads song "We're on a road to nowhere."]

Know when to fold 'em.

2005-03-01T02:04:00.000-08:00

Some insight into Charlie Munger, the less heralded partner in Berkshire Hathaway.

"He regards the lessons of poker as a great help in daily life and business, and notes that an important rule from poker is to fold when the odds are against you and to make big bets when you have a strong edge. Such times don’t come often."

Turning point indicator?

2005-02-28T14:03:00.000-08:00

Back in the 90's, Merrill Lynch fired a more conservative Internet analyst and hired Henry Blodget over a $400 call on Amazon and the attention it got, then watched the Internet bubble implode. [and Blodget cost them a ton in fines..]

In the late 90's, George Soros hedge funds threw in the towel and started buying the tech stocks they had been avoiding, only to watch them plunge not too long thereafter.

Julian Robertson, on the other hand, stayed with the value bent in his funds, faced criticism, lost assets and ultimately closed up shop, right as the tech bubble imploded and his value stocks turned the corner.

Merrill Lynch recently cut back their commodity trading just as the commodity market hit bottom. Commodities markets haven't looked back since.

So these kinds of moments when heads roll, long held tactics change, entire departments are fired can sometimes signal something much larger.

Thus, could the below be a sign that the real estate bubble is finally cresting?

A Prominent Wall Street Bear Calls It Quits excerpt from WSJ.

"One of Wall Street's most high-profile bears during the stock market's bull run in the 1990s -- and more recently a big bear during the real-estate boom -- is going into hibernation, this time for good.

David Shulman, the former chief equity strategist at Salomon Brothers, will retire from his position as senior REIT analyst at Lehman Brothers Holdings Inc. on March 11.

Mr. Shulman had been bearish on the stocks of REITs, or real-estate investment trusts, for the past couple of years -- and wrong, as the stocks delivered annual returns of more than 30% in each of those years and trounced the broader market. And Mr. Shulman isn't shuffling off into the sunset quietly: He still thinks REIT stocks are too expensive."

"Mr. Shulman joined Lehman Brothers to cover REITs in 2000. His resignation comes less than a month after he published his most bearish note on the sector, an outlook for 2005 titled "More Than a Real Estate Mania." In it, he likened selecting REIT stocks for a top-picks list to "rearranging the deck chairs on the Titanic" and predicted the widely tracked Morgan Stanley REIT index would fall 18% this year."

Jim Rogers not interested.

2005-02-27T21:02:00.000-08:00

Jim Rogers on Cavato on Business (CNBC) this weekend predicting that 2005 would be a down year in the US stock market, and 2006 probably worse. His reasoning was that the last 2 years have seen a lot of stimulus from Washington, which is now over, leading to a slowdown in the economy.

Richard Russell on oil?

2005-02-26T06:24:00.000-08:00

Richard Russell publishes Dow Theory Letters (address: La Jolla, California. Where do I get that gig? And note to Richard - web site layout needs work, IMHO, home page looks like a site map) and though I don't keep up with his work much, I think he's had a reasonable record over time, and was one of those people warning about the bubble of the 90's.

My impression (and I could be wrong) was that he was focusing mostly on gold these days ('because it's the only true money'), so it's interesting to see him talking about oil. This article has a some of his commentary and a chart showing a technical target of 64 for the price of oil.

[My internal debate over whether oil is the new gold (inflation hedge, currency alternative) and tech (demand growth story) all wrapped up in one continues..]

Stratfor on China.

2005-02-24T20:43:00.000-08:00

From interviews on CNBC and Barrons:

Stratfor analyst George Friedman suggesting China might be in for a significant slowdown, and possibly a third Asian meltdown. (Japan 1990, East Asia 1996, China 2005-6?)

China has $600 billion in non-performing loans according to S&P, Stratfor thinks it might actually be closer to $1 trillion. They have $650 billion in reserves, Stratfor thinks that's slightly exaggerated, so their bad debts may significantly outweigh their reserves. In addition, there are parallels to Japan in the the real estate / building booms, likely overcapacity in it's industry, misallocated loans, and aging populance. In addition, in China there's seething discontent in rural areas. A number of Chinese companies have recently been shopping for investments overseas, a possible hint of capital flight to safer havens.

Note: A China bubble is something Peter Thiel also suggested. And Jim Rogers said look for a crash in China before investing.

Synchronicity.

2005-02-23T21:37:00.000-08:00

Jean-Marie Eveillard, a value manager with a very good track record, was interviewed in the March issue of SmartMoney magazine and disclosed his fund is in the process of buying Korean stocks.

PS. He currently runs the First Eagle Global Fund, but he is retiring soon.

Internet Bubble Part Deux.

2005-02-23T21:23:00.000-08:00

Peter Thiel founded Paypal.com and sold it to Ebay (note "to Ebay", not "on Ebay") a few years ago for some very good money. So he's an Internet guy who made money and actually kept it.

He's quite a skeptic about Internet stocks now as he thinks we're in a second Internet bubble, and he recommended shorting Internet stocks at the start of the year. In addition, he thinks that Google is taking the "King of the Internet Stocks" title from Ebay, and so he is a little more positive on Google than things like Ebay, Yahoo, Amazon, et. all.

Read more here.

Right next to China.

2005-02-22T18:51:00.000-08:00

Mark Headley of Matthews Asian funds suggested on CNBC today that the market people should be paying attention to is South Korea as there's a 'whiff of recovery in the domestic economy' and that it's now turned the corner after a couple of difficult years.

This fund family runs a number of Asian focused funds with solid track records.

Least researched stocks = high returns?

2005-02-19T00:13:00.000-08:00

I crave unique investment insights, and I'm especially interested in them if they're against the grain. So I find this article fascinating.

The concept: a portfolio of some of the stocks that were least researched on Morningstar's site provides on average above market returns in the following year.

Oil & energy.

2005-02-18T23:56:00.000-08:00

Oil and energy are an important part of the market, and rather than duplicate posts, if you're interested in energy and oil I'll refer you to my other blog Land of Black Gold .

Bill Miller - Sunny Side Up.

2005-02-17T20:28:00.000-08:00

Bill Miller of Legg Mason Value Trust, fresh off beating the S&P500 for 14 years straight, pens a remarkably positive 4th quarter update in which he drops a few familiar names and slays a few popular dragons (account deficit, falling dollar).

A one line summary: "I am quite optimistic about 2005."

Yield curve puzzle.

2005-02-16T04:50:00.000-08:00

There's lots of speculation over why long term bond yields aren't budging despite the Fed moves and why the yield curve appears to be flattening, especially since the yield curve is one of the best predictors of growth or recession in 9-12 months.

Is the bond market predicting an economic slowdown or that we are nearing the end of the current up-cycle? [Credit spreads near lows though, which doesn't support this idea.] Is foreign central bank bond buying as they try to hold down their currencies driving down these yields? Is there some type of blow up [ala Long Term Capital] in the wings? Is the 'carry trade' driving it down? Does it reflect the fact that bond investors believe the Fed has control of inflation?

The most interesting speculation I have read recently comes from Stephanie Pomboy of MacroMavens, interviewed [$] a few weeks ago in Barrons:

"Q: That's why interest rates will remain stable?
A: It strikes me that the yield curve might be sending you the signal that basically this is an economy that just can't handle significantly higher long rates. We've gotten to this point on the back of consumers' borrowing, and they are extremely extended and while employment is picking up, it's still not sufficient. I always picture that scene from A Few Good Men where Jack Nicholson says: "You can't handle the truth!" And I'm thinking we just can't handle higher rates. I mean that's it.

Q: The economy has a very low threshold of pain for higher rates?
A: I think it takes less and less of an increase in rates to snuff out economic activity, and it seems like a statement of the obvious. I mean, we've got more and more levered, of course, and it would take less and less of an increase in rates to slow this whole consumption engine down. Consumer credit or cheap credit is the stuff that keeps this economy moving. Raise the price of that, and we're going to move a lot slower. I think that is in part what the yield curve is saying is that this is an economy that's built on a continued supply of cheap credit, and if we want to keep moving forward, we can't let long rates move significantly higher."

Up 25% in 2005?

2005-02-14T17:40:00.000-08:00

Ken Fisher made a nice couple of calls in Forbes magazine sidestepping much of the stock market bubble of recent memory. He uses a unique methodology: He examines where most predictions are clustering and avoids those areas of consensus. He focuses instead on the possibilities that people feel aren't likely, as he believes that the real future lies somewhere in those. His bottom line: The market does what people least expect.

On Forbes on Fox this weekend he made a bold prediction for this year's stock market returns. Based on statistics on prior first year presidential terms from the last century, which have been either negative or up greater than 10%, with an average return of 28% in positive years, he's predicting 25% in 2005.

Jim Rogers - Investment Legend, World Traveler.

2005-02-13T19:35:00.000-08:00

Jim Rogers on CNBC, FoxNews, and in his recent books:

1.) Is hot on China. They have made tremendous progress, the people are very hard working, they are embracing capitalism with gusto, but.. he says you must wait until they hit the inevitable air pocket and you see the headline "Crisis in China" of some sort, at which point he will probably be buying. He believes that the 21st Century will be China's, and he believes this so strongly that his infant daughter is learning Chinese and English.

2.) Is hot on commodities. He believes we are in the beginning of a cycle that favors commodities of all sorts: oil, sugar, soybeans, copper, etc. His commodities index fund is one of the best (I believe the best) performing indexes since it's inception in 1998. These moves can be 18 years or so in length, according to his studies of previous cycles.

3.) Is not hot on India. Based on their tremendous infrastructure problems (NY Times seems to agree - registration required), inclination toward bureaucracy, cultural and political bent, and internal infighting, he thinks China will be a much stronger play.

Oil and SP500.

2005-02-11T18:11:00.000-08:00

Jim Cramer notes on his radio show that oil now makes up 8% of SP500, versus two years ago when it was 5%. His theory is it goes up to 10%. He also pointed out the breakouts in the Canadian oil stocks.

Not your usual China plays.

2005-02-11T11:13:00.000-08:00

Donald Straszheim of Straszheim Global Advisors on CNBC recommending a China play consisting of overweighting those companies who are taking advantage of China opportunities versus those who don't. Eg. Wal-Mart WMT over Target TGT, Yum Brands YUM over Wendys WEN, Godzilla vrs The Incredible Hulk. (Godzilla's next door, after all.)