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  • Association for Investor Awareness - Week of 08/27/2009

    In This Issue:

    The Outlook Is Better For An Improving Economy
    Profit Growth Can Be Misleading
    Big Companies Still Have An Advantage
    Emerging Countries Are Making A Strong Recovery
    Two Long Term Dividend Payers Look Good
    Fasten Your Seat Belts, Oil Prices Are Roaring Back
    The Bottom Line This Week

    It's been a bear market for bears recently as their many doom-and-gloom pronouncements have gone wanting. The old bull just won't quit, despite all the logical arguments that predict his demise. It's a good lesson that paying attention to what is actually happening in the stock market is more profitable than following theories. Mother Market always has the last word.

    The numbers tell the story. Since our last letter on July 29, the Dow and the Nasdaq have gone up 5.2% and 2.9% respectively. In only one of the four weeks did the market slide into negative territory, and then by less than 1%. By contrast, the best week registered a 7.3% gain. That's the sort of tailwind we like to have.

  • Association for Investor Awareness - Week of 01/29/2009

    In This Issue:

    Reasons For Cautious Optimism Continue To Appear
    Many Promising Stocks Attract Long-Term Investors
    The Bottom Line This Week

    The stock market continued to lose ground last week as the Dow and the Nasdaq declined an additional 2.5% and 3.4% respectively.

    A growing number of analysts believe the stock slide will continue until the market tests (reaches) the low point it made on November 20. If so, it will be a classic correction to a bear market rally.

    A much bigger issue is what will come next if the November lows are reached. Pessimists believe the market will continue to decline until blue chip P/E ratios get closer to 10. If so, the S&P 500 would drop from today's 832 to 750, or so. Super bears think the index might fall another hundred points.

    On the other hand, optimists believe the market will bounce back in a classic stage two bear market rebound. If history repeats, the second time should be the charm as a new rally would typically test its former highs – and then continue up. The 298 point jump the market took during the first three days of this week suggests that the optimists may be right.

  • Association for Investor Awareness - Week of 01/15/2009

    In This Issue:

    Sometimes Good News Can Be Bad News
    Treasury Bonds May Be A Bubble
    It’s Time To Choose Shorter Bond Maturities
    Three Ways To Win If Treasuries Decline
    Investing In Times Of Extremes
    Staying Healthy During Impossible Times
    The Bottom Line This Week

    The optimistic mood that lifted the stock market two weeks ago didn’t last very long. In fact it might have been the smallest January bounce on record. After the 2nd, prices started to move back down again.

    There is some solace in noting that the market is still up some 20% from where the zigzag rally started on November 21. Despite all the turmoil, it may turn out that the bear market reached bottom at that time. We shall know soon enough.

    In any event, by the time last Friday afternoon rolled around, the Dow and the Nasdaq were down 4.8% and 3.7% respectively. During the first three days of this week, the market continued to decline sharply as more disturbing economic numbers were announced.

  • Association for Investor Awareness - Week of 01/01/2009

    In This Issue:

    The New Year Should Bring Investors Some Relief
    Consumers Have More Money Than Holiday Sales Suggest
    Most Corporations Are In Good Financial Shape
    Economy Gains From Cheaper Dollars, Oil, And Interest Rates
    The Faster The Pain, The Quicker The Gain?
    If You Don’t Play, You Can’t Win
    The Bottom Line This Week

    Investors who hoped that Santa might bring them some cheer over Christmas were sorely disappointed. The usually-jolly old gentlemen dropped off a rather large bag of coal. Even that gift was worth a lot less than would have been true a few months ago.

    In any event, when the stock market closed on Christmas week, the Dow and the Nasdaq were down another 0.7% and 2.2% respectively. The mood brightened over the weekend when unemployment claims dropped unexpectedly. During the last three trading days of 2008, the market went up 260 points. We suspect that the occasion will be celebrated with a little extra bubbly on New Years Eve.

    Of course, Wall Street’s revelers will need to overlook the fact that the S&P 500 went down a dismal 41% during 2008. It wasn’t the worst annual performance in history, but it was the worst in the memory of most investors living now.