Success Equals Opportunity & Preparedness… how prepared are you?
Here we are again, another exciting week ahead.
Please refer below to another update that I have received from another source of mine… one of the consistent messages that I am hearing/receiving is, that it has never been more important to slow your game down and not get caught up with the masses … as the old saying goes S.H.I.T happens… your reaction AND OR overreaction will massively influence your decision making processes… ALWAYS REMEMBER THIS - What are the TWO most influential states in HUMAN BEHAVIOUR…FEAR & GREED!!! below is an extract from an email I received… and before I go on once again, I’m not offering financial advice; you should always get qualified professional advice when making financial decisions. What I am doing is letting you know what has worked for me and giving you the opportunity to check it out for yourself. This message is intended to provide general news and information only. Readers should rely on their own enquiries before making any decisions regarding their own interests. Please do not rely on any part of this message as a substitute for specific legal or financial advice. All material is copyright 2008 From Email:
Hi Team, Friday afternoon (Oct 24, 2008) seen our Aussie market break its support area around 3,950 – 4,000 level, with this now broken our next major support area will be around 3,500 our old high from 2001 / 2002, especially after another sharp fall Friday night on the Dow. I have been researching non stop, well over 20 hours a day over the last few months and as we continue to witness the greatest credit unwind in history, our share market A.T.M must be getting pretty empty of leveraged money by now I recon. What I see coming in the next few weeks will be a shock to many investors that have sold, it will be the biggest and most bullish week we have ever experienced in global markets history. Email me george@georgemihos.com if you would like to receive copy of chart-it is a 25 year chart of our Aussie market “NOTE TIME HAS NOW CAUGHT UP AGAIN AND WE ARE ABOUT TO TOUCH A MULTI DECADE TREND LINE”….
Over the last few days many of you have emailed me and asked why this sell off, I can only come up with two words “HUMAN EMOTION”… One thing that is predictable time and time again no matter what catastrophe it is and that is human reaction to such an event always remembering Warren Buffet’s famous words “Short term the Share Market is a voting machine, long term it’s a weighing machine. As the above chart clearly displays, it weighs in again back on its long term trend line just about every time… Below is a great article that does well to sum up everything in a few paragraphs…
WHERE TO FROM HERE?Having received many emails and comments asking a variety of questions regarding the markets recently, we are going to do our best to briefly outline where we should go from here. Firstly, what is happening? An immense amount of our financial system is built on credit, credit that is now rapidly deteriorating. This is causing a sell off in just about everything, regardless of the fundamentals or technicals of the assets in question. This has been seen to a great extent in gold stocks, with many being sold down to the same prices they were when gold was $500/ounce. Think of the markets as people standing on a carpet rug, and the rug has suddenly been ripped from underneath them. Everyone falls down.
This “mass exit” from just about everything has caused a rally in the USD, since most of these assets are dollar denominated and therefore there is a strong demand for dollars from investors wanting to get out of positions.
The greenback spike has also been caused by non-US central banks cutting interest rates. The feeling is that many central banks will continue to cut rates, but the
The rally in the greenback and the withdrawal of credit from the system has caused commodities in general to also fall, reducing inflationary pressures and therefore the need to own gold as an inflation hedge. This has damaged the save haven case for investing in gold and gold stocks. There is also the deflation/inflation debate surrounding what kind of a recession we are going to be in for. We are of no doubt that the vast amounts of money being pumped into the system will cause serious inflation worries, but the question is when?
If everyone is prepared to just sit on cash for a year, the inflationary effects of the massive cash injections by the
Also investors will probably keep moving into US dollars and yen while other currencies can cut interest rates and devalue their currencies more than the US and Japan.
Perhaps when every major central bank in the world has rates of between 0%-2%, investors will then move to the currencies of the country’s that are in the best economic shape, and that is definitely not the
Our stock positions have been hammered, we feel the pain too since we hold all positions that we recommend. Currently we are holding our positions in our commodity stocks and especially our gold stocks, gold options and cash. There are a few events that need to pass before we make a decision to either reduce our holdings or increase them. First up is the
Once again, I’m not offering financial advice; you should always get qualified professional advice when making financial decisions. What I am doing is letting you know what has worked for me and giving you the opportunity to check it out for yourself. This message is intended to provide general news and information only. Readers should rely on their own enquiries before making any decisions regarding their own interests. Please do not rely on any part of this message as a substitute for specific legal or financial advice. All material is copyright 2008
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