Deprecated: Assigning the return value of new by reference is deprecated in /data/9/1/30/99/1356425/user/1454503/htdocs/blog/wp-includes/cache.php on line 36

Deprecated: Assigning the return value of new by reference is deprecated in /data/9/1/30/99/1356425/user/1454503/htdocs/blog/wp-includes/query.php on line 15

Deprecated: Assigning the return value of new by reference is deprecated in /data/9/1/30/99/1356425/user/1454503/htdocs/blog/wp-includes/theme.php on line 505
Dave’s Investment Blog » 2009 »
Dave’s Investment Blog
Welcome at » 2009 »

Are you familiar with the events that occur every February 2 in Punxsutawney, PA? Punxsutawney Phil, a groundhog, comes out from his winter hibernation and looks for his shadow. If he sees his shadow, he goes back into hibernation because winter is going to last longer. If he doesn’t see his shadow, winter is ending.

The price movements of the market this week may be similar to the legend of Groundhog Day. If the market holds or rises above the lows set last November and re-visited on this past Monday, we may be closer to the end of this Bear market than most people think. If the market drives through the levels set by the S&P 500 last November, 741.02, then this Bear market will last into next year.

If the stock market holds above the annual lows for the S&P 500 and the leading indicators rise next month, we will be receiving more positive signs for the economy. Three consecutive months of a rise in the leading indicators of the economy has always signaled an end to the recession. The economic leading indicators have risen for the months of December and January.

Everyday our economy produces $39 billion of new goods and services that did not exist. We restore the capital (money) that has been destroyed. Eventually as this capital is redeployed throughout the global economy the market prices of the companies that are organizing resources to produce these goods and services at a profit will rise.

Asset prices will rise as deflation melts into inflation. Home values will rise. People will experience the feeling that their wealth is growing again. As people’s wealth grows they feel more comfortable consuming more discretionary items. As people throughout the world increase their spending the demand for many of the goods and services that are produced in the United States will rise.

As the demand for goods and services rise more people will be employed. As more people are employed, employers will increase pay to attract qualified workers. The supply of workers available will contract and this will create additional wage pressure. Employers will invest in tools that will increase the productivity of their workers. This will create additional demands for more production.

Tax revenues will increase as incomes rise and employment expands. The government deficit will shrink and eventually politicians will renew the debate on what to do with the government surpluses. Tax rates will fall.

All these events will transpire over the next decade. They may begin before this year is over. We will get one more indication of when we will be turning the corner in this week.

Make money by buying low and selling high. Prices are low, buy! Buy quality! Don’t forget garbage in results in garbage out. Don’t let short term fear deprive you of long term profits! My clients and subscribers will be getting their long term profits! You should get some too!! It’s fun!!!

Have a fantastic, profitable Day,
Dave