Do we have any stock market junkies?

[ASP785]

As a 30+ year investor, I'm stumped these days. Up is down and down is up. All of the old methods and formulas have been thrown out the window.

I have been investing about half the time as you, but I am right there with you on this sentiment. If the Obama administration does deposit a "1 trillion dollar coin", or any other value for that matter, to pay the nations debts, what happens then? The Fed starts selling T bills to control inflation. I am proceeding with much caution right now. It's not the market I really don't believe in, its the 16.4 trillion in debt.

 

[Wheel Gun]

what happens then? The Fed starts selling T bills to control inflation.

Well, in the past, one could flee to precious metals. But even that doesn't work anymore. So many people have invested in gold over the last five years, it doesn't work as the inflation hedge as it should. Now, people are treating gold and silver like big piggy banks. When the markets plummet (over Europe or some Fed statement or technical signal), people start yanking money out of gold to cover themselves and metals plungs right along with equities. For the first time that I can remember, gold prices fall and rise in concert with the overall market. It's not supposed to do that.

And, since I'm on my soap box, here's another factor that's making it really hard for the small investor. Prior to the last few years, the markets were focused on private sector firms that were behaving (or not behaving) profitably. None of that really matters any more. It's all about government actions now. Companies and sectors that are in political favor are expected to get government money so they're worth more. Sectors that are disfavored won't be getting government money (in the form of handouts, stimulus, favors, etc) and any publicly traded company in that sector is viewed as a loser--regarless of whether they're making money or not. Profitability and market leadership isn't nearly as important as fiscal spending. Watch what sends the Dow up. It's signals from the Fed that free money is coming. It's remarkable how quickly Wall Street bought into the promises from Washington.

I've just almost run out of ideas. Maybe I should just buy carbon credits.

 

[Bellboy]

I bought RDN back in the summer and dumped it last month, I think I should have held on a little longer.