GDP

As we all expected, GDP was terrible. There is no one out there expecting a magical turn around in the economy soon. There isn't a whole lot to be cheery about in the economy right now. That said, we are still the largest most innovative economy in the world. There are still companies out there making money and we will rebound from all of this.

That said, I am still not putting all of my capital to work going long anything. I am still net short equities in my portfolio and I plan to be for the foreseeable future. I have given some picks in previous posts and I am sticking to them. However, I still have a lot of my portfolio in cash. I might add a little to the (DIA) position I started a while back. I will be interested in seeing how the Dow reacts to the psychological 7000 level. If we blow through that today, there is probably a lot of downside.

A quick word about the Bank of America (BAC) bonus fiasco. Why the secrecy? Why are Thain and Lewis withholding information from the AG if they did nothing wrong? If Ken Lewis is throwing up his hands saying he didn't know anything, why is he being subpoenaed? Thain had to tell the NY Atty General something to compel Cuomo to subpoena Ken Lewis. I think there are some rats out there. There is no other way to look at this. This is theft. It is the outright theft of taxpayer dollars. NO ONE deserved a bonus at Merril. You get bonuses when the company makes money. The company couldn't get itself sold to Bank of America fast enough. The losses were criminal. To pay out bonuses to executives (or anyone for that matter) when the company loses ANY money, matter the less billions. That is theft. There is nothing else about it.

How about an option trading strategy for today? I think I am going to spend the majority of the day on the sidelines. There is too much uncertainty out there. When I say uncertainty, I mean we are so oversold, yet the market continues to sell. If everyone was just negative or just positive, I can trade that, I just fear jumping into anything short at this time and having my head chopped off by some crazy short covering rally. Just like any trader, the most important thing I do is manage risk. When the market sends me risky signs, I stay on the sidelines. I might be back before the weekend. Until next time, stay low risk..

Weak End of the Day..

5pm We started higher today for quite a while and the market simply ran out of steam. The financials looked strong on a weak tape and Oil looked good. There are still WAY too many issues out there to be really bullish but there are some encouraging signs here. IBM (IBM) had some great news about earnings, raises, and a share buyback. Chubb (CB) raised their dividend.

We are still uncertain about what the rules are going to be from Washington. There needs to be more certainty about companies making money (remember that?). We need to see some stabilization in the financial system and the housing market. There are still a lot of things to work out before we can call this market healthy.

That said, there are still ways to make money. Stay tuned, and until next time, stay low risk..

Possibly an Up Day Today

8:45am Tuesday's dramatic rally was clearly a short-covering rally that caught some people by surprise. The futures are pointing to a higher open this morning and it feels a little different than Tuesday. We just had a nasty jobs number and a weak durable goods number this morning. The futures took it in stride. I think we are at a point in the market cycle that is giving the benefit of the doubt to the downside. Anything that says we are not getting dramatically worse will be taken well. On the other side, something that shows a little sign of life in the economy will be taken with some skepticism but probably take us higher.

That said, as odd as this sounds, it might be time to buy a little First Solar (FSLR). Yesterday felt like a capitulation day. Volume was in excess of 14 million shares. The last time we saw that kind of volume was April 30th. I think we shook out some of the weak longs. I would be buying the stock incrementally. There is no need to get crazy with a full position here. You have some potential down to the Nov 20th low of $87.23 but there seems to be a lot of support down there. You can pick up a little today and average down all the way to about $90. Keep a stop under the Nov 20th low. Just like anything else in this market, caution and small position sizes will keep you in the game. I think the upside potential significantly outweighs downside risks. Now that the stock took a massive haircut yesterday, the valuations are starting to look nice.

Oil continues to firm up nicely. I still like the (DXO) here. I think it will still head higher and I am keeping that trade on.

Gold (GLD) is looking weak here, but at this point we are playing with the house's money. We have doubled our investment by taking profits at good times and we still have a little of the position on. If it goes to zero there is no risk in the trade. I haven't sold the rest of it yet.

The Silver (SLV) trade probably needs to come off for now. You can still get out with your original investment. The charts have broken down here and we need to wait for better times for the metal.

Hang on for an interesting day today. Remember to be careful and stay small. And until next time, stay low risk..

A little late..

12pm One of the nice things about being a trader is the flexibility of the schedule. In this case, I had some stuff to do this morning. I apologize for not getting this post done earlier. That said, here are my thoughts now.

First and foremost is the First Solar (FSLR) trade. Man did that work out well. I took it off a little bit ago. I took a 50% profit. I will take 50% profits all the time when they come in the space of 24-48 hours. Remember, the trade I set up was betting that the stock would move violently. It was set up to take advantage of the movement, not the direction. For example, when they reported after the bell last night I was excited that the stock was up by $16 after hours. Then the conference call proceeded and the company gave lame guidance. I was excited to see the stock fall off a cliff and I was glad to see it continue falling all day do far. Those are the easy trades. They are speculative and not appropriate for a large chunk of a portfolio. But they are fun and easy ways to juice returns.

After the action yesterday, I feel comfortable about telling you yesterday to take off another portion of the Gold (GLD) trade. I think there may be some upside to come, but the downside risk is high at this point because the technicals are breaking down. As a trader, you are never going to pick an absolute top or bottom. The bottom line with this trade is you have taken profits and doubled your money since Nov 20th. You still have the opportunity to take advantage of the upside that is still available and you have locked in some profits in the meantime.

One last comment. The Oil (DXO) trade from January is still under water. I admit when I make mistakes. But with this one, we were buying the ETF as an investment, not the options as a trade. Very bullish things have been happening in the Oil market right now. Supply numbers were bullish this morning. Demand is starting to (slowly) come back. The excess supply in the market appears to be coming off as well. Again, I don't think Oil goes to $150 any time soon, but you are in the double-long ETF. This means it doesn't have to go very high for you to make a TON of money. As a trader, being early is the same as being wrong, so I was wrong in that sense. However, I never took that trade off and a gain or loss is only a gain or loss when it is booked. I haven't booked anything yet. There is a long way to go with this trade. Until next time, stay low risk..

Why?

7am Why? That is the question most investors are asking right now. They are asking, "Why should I put any new money to work at this point?" If the market goes down every single day, what incentive do they have to invest in the market. The vast majority of the participants in the market use their 401(k) and maybe some mutual funds. Wall Street sold these highly profitable (for Wall Street) investment vehicles as essentially savings accounts with high yields and some risk. If people were told that they had a distinct chance of losing half of everything in their portfolio no matter how long they have been saving, the money flowing into the market probably would have been much smaller.

That is the situation right now. People have seen it happen. They have seen a huge chunk of their 401(k) evaporate and they hear all the doom and gloom on the news every night. Why put new money to work? My savings account that Wall Street sold me isn't going up anymore. It just goes down every day. That is the big predicament we are in. If there is very little new capital coming into this market, there is little impetus for the market to go dramatically higher.

What makes things worse is that the market is controlled by Washington right now. Even though there are companies with strong balance sheets making a ton of money, no one is looking at them. Everyone is only paying attention to what policy actions are coming out of the government. In the certainty vs. uncertainty battle, Washington's lack of clarity on every policy they have hinted at is keeping the market down. It will continue to go down for the forseeable future while the government gets around to making policy.

So for those of us who understand that the market goes up AND down - and can make money either way - there are always opportunities. Look at the First Solar (FSLR) trade I made yesterday. I set up a non-directional option trade to take advantage of the upcoming earnings release this afternoon. We will see how that goes tomorrow.

The option trade I told you about in the Gold ETF (GLD) is starting to get to a turning point and it is time to watch carefully. If we can hit the $1020 mark or higher, we are probably off to the races. It hit near the recent high a little over $1000 the other day and it hasn't gone higher since. If it continues to fail, you need to get out. The chart wil lbe a definite double top.

I would take a little profit either way. I would probably sell half of what is left of your position. It doubled in November and you took half profits. That means there was no way to lose money on the trade. It has almost doubled again and I would be comfortable taking half of what is left. You let the rest run and pay close attention to the technicals. If you begin to see dramatic moves higher on low volume, it is time to get out. The market severely punishes lemmings. The pros make something move dramatically higher, then the lemmings jump in but they don't have the resources to add any volume to the move. The pros dump their shares on the lemmings, the lemmings get stuck holding the bag. Pros make money and lemmings lose their shirt. It happens all the time. Don't be a lemming. Until next time, stay low risk..

How Sick...

7am How sick is this market when we are looking at an early rally because of the Citi news. For those who don't know, the word is that government will convert their preferred shares to common shares (C) and not fully nationalize the company, effectively wiping out common shareholders. Who is looking at this news and saying "Whew... time to buy some Citi."? We own stocks because the companies behind the stocks earn money and create shareholder value. Citi won't make money for the foreseeable future. If they return to profitability in the future, it will be nowhere near anything we have seen. Why is anyone buying this stock?

We are probably looking at something like the European model of nationalizing banks. RBS and Northern Rock were taken over in chunks. Citi and Bank of America (possibly others) will probably either be taken over in a similar way or the government will do something that is an effective nationalization without using the actual word. There are enough people in the country that are loathe to see true nationalization that the government will avoid the word. But at the end of the day, nationalization will and should effectively happen.

On an optimistic note, there are some things that are looking positive for the economy. Oil is in the process of bottoming. Demand is starting to stabilize and supply is coming out of the market. It isn't poised for another bubble-like takeoff, but it is starting to bottom. I mentioned buying the Double Long Oil ETF (DXO) in December to take advantage of this. It is down big on a percentage basis from where I initially recommended it, however I am sticking behind that pick. I bought the ETF as an investment, not a trade. It is not time-sensitive.

Why is oil demand positive for the economy? Oil is an important gauge of overall economic activity. As more things get produced and more people consume, more oil is needed. If oil is starting to bottom and we are seeing more supply and demand equilibrium, that is a positive sign for the world economy. It is economics 101 (the government needs a serious lesson in this) when supply and demand (without government involvement) meet, price is discovered. Oil is not the only indicator to watch for good economic health, but it is a good sign so far.

A Word About the Banks

If we hadn't allowed the big banks to get as big as they are, we would have probably seen an FDIC raid on the biggest of the banks already. But as we have so painfully watched over the last couple months, the government doesn't have that option. The big banks are so interconnected that we simply can't allow them to fail. Most of us know that part already.

The question is, where do we go from here? I have heard two excellent-sounding ideas from people much smarter than I am.

First, let me be clear. I am a trader. I get paid for managing risk and taking profits. I don't get paid for dreaming up ideas of how to save the world. There are other people that take care of that.

One of those smart people is Meredith Whitney. If you are not familiar with her work, she has done probably the most accurate analysis on the banks complete inability to reign in the children running them. Her suggestion is to do a non-punative capital injection into some of the smaller banks who stayed away from the mortgage garbage. These smaller banks would be able to leverage their stronger balance sheets and use the capital in an appropriate way (lending) like a real bank should. This would be different than giving it to a big bank like Bank of America so they can pretend to be solvent. Simple solutions are brilliant.

The other excellent idea is to take care of the Level 3 assets on the books of the big banks. The current problem is that the banks refuse to sell them. It is not because there isn't a buyer. If the banks sold the Level 3 assets on their books, there would be a real price for them and the ig banks would get exposed for how truly insolvent they are. In this case, the government would buy the assets at par. They would hold them until maturity and when the true value is known years from now, the banks reimburse the government for the difference between par and the ultimate cash flow value of the asset at maturity.

Neither of these are my ideas, however I think they are pretty intelligent. Of course, nothing like this will truly happen in any TARP, or stimulus or any of the other government measures coming down the road. Don't think there's more coming? You're crazy. No government will waste a good crisis like this. This is a great time to take more power and money from the constituents right from under our nose. Keep this in mind in the market this coming week. Until next time, stay low risk..

Another Quick Post Before the Weekend

This market is a puppet. Every time we see a sell off, it happens because we don't know what else to do. We have to look to the government to tell us what the next move is going to be. The overall market was a complete mess today until 2:14pm when the White House press secretary said that they don't have plans to nationalize any banks, even though I think they should.

Here are two things (of many) to look for next week. Look for actual details coming from Geithner on housing and banks. If we don't have some serious clarity, look for the market to sell off. It will sell off just like it does when it doesn't know what else to do. Remember, we don't have earnings to take us higher. The market is a puppet of the government. People do not want to risk capital when the government is not giving clarity on what the rules are going to be.

The other thing I am looking at is First Solar (FSLR) earnings. They are set to report after the bell Tuesday. I will apply my option strategy to this stock and the perfect time to do so will be Monday morning. Keep an eye out for it as I will be reporting on (FSLR) later in the week. I promised that my (PCLN) trade would not be just a fluke and (FSLR) should prove it. Until next time, stay low risk..

The Death March

We timidly held the lows yesterday in the Dow. The way the futures look this morning, we will probably see some downside from here. It may be time for me to add to the (DIA) position I bought last week. The decision for me here is to ask myself if there is a LOT more downside or if there is just a little. The problem is, I think we go much lower here. I think we can see a 6 handle on the Dow in short order.

I titled this post The Death March because that is exactly what it feels like. There is no panic in the market. The volume and the trade is very orderly. That means we will continue to head lower for the forseeable future. To call a bottom, we want people jumping out of windows. We want bulls to throw up their hands and give up. We want a bloodbath. We haven't gotten that yet. You need to see a huge volume day that heads dramatically to the downside before you can get in with both feet. It might be a while before we get that.

Knowing the direction of the market helps with any trade or investment. That's why it is important. You also need to know the direction of equities to understand where the capital is going to flow. With the choices investors have now, you don't need to buy individual stocks, hold them forever, and hope for the best. The investors who are going to survive are the ones who find trends of capital flows and get in on them early. Capital is clearly flowing to hard assets and that is where you need to be. Use ETF's to take advantage of this trend. Look at (GLD), (DGP), (SLV), (DBS), (AGQ), (PTM), and (PGM). These will get you exposure to Gold, Silver and Platinum.

Do not waste your time buying the stocks of the miners. There is plenty of money to be made in these ETF's. The miners have too many variables involved with their businesses and therefore too much risk. I will be back this weekend with a little more. Have a good weekend and until next time, stay low risk..

Looks like..

Looks like things are going to continue to be ugly. Of course, there are places to be in the market to make some cash. There is no reason to be fully invested at this point but you can't let cash sit on the sidelines forever. This is especially true of the inflationary policies that the Bush and Obama administrations have been implementing in recent months. You may feel safe in cash right now but inflation is going to punish your buying power

One of the ways you can take advantage of this is using options around earnings releases. You need to have the correct strategy and use the correct underlying equities. To be fair, I can't officially take credit for this trade because I didn't put it on the blog in advance. That said, I put together an option trade that allowed me to make 50% in 2 days on (PCLN) surrounding their earnings release. This strategy is too much to put on a blog but I will be creating an ebook with the exact guidelines for how I do it. It is fairly simple but the rules must be followed exactly. The strategy allows for very little risk (my favorite kind of trade) and the possibility for huge rewards. I will be getting more names out there as I trade them so we can see this in action.

Take cover in this market over the next couple weeks. Make sure you are light and nimble, but be sure you can't stay in cash forever. The inflation monster will eat your portfolio if you allow it to. Until next time, stay low risk..

Wanna Make 20% in a Day? I did...

That sounds like one of those get-rich-quick crazy claims you see on late night TV. Not true. Look at my previous post. I told you to buy (SLV) calls. Specifically, I told you to buy the Jan 2010 $20 calls. I bought them Friday. I am now up 20% and Silver is heading higher as I write this. I have not sold anything yet. I think this trade has a LONG way to go.

A quick update on a couple trades I told you about earlier. First is the long (DIA) trade. I added to the position yesterday. Here is my thinking with this one. As of the open this morning, 8 of the 30 stocks are currently trading below $15. There isn't much further for these stocks to go. Stocks can only go to $0. And seeing that the Dow is a price weighted average and not a market cap weighted average like the S&P, there has to be more upside than downside to the Dow. Just do the math. That said, I bought a small postion last time and a small position this time. Normally, I break down a purchase into 3 purchases when I buy an investment. This time I am breaking it down into 5 purchases. I am leaving some powder dry here.

The other trade I mentioned earlier is the long (TIP) trade. This trade is looking VERY nice technically. It is very close to breaking above it's 200 day moving average. If it breaks above the 200 day, it is going to have a lot of support to the upside. It would take a lot for TIP to go lower technically. The fundamentals simply don't support a dramatic downside from here.

Keep in mind, options are used for trades and stocks/ETF's are used for investments. I use investments for trends I see that I can't pick a defined end to. Trades are for trends that will grow quickly and fizzle eventually. Options allow you to take on very limited risk and reap huge rewards. Stocks/ETF's allow for a trend to play out without a time-defined endgame. Keep that in mind. Until next time, stay low risk..

Here is Your New Bubble..

You are going to get sick of hearing it, but Gold continues to go higher. As an investor, you only need a couple of good ideas per year, to be outrageously profitable. I have been on the Gold story for the last $200. It is currently heading higher this morning. Here is the kicker. The dollar is as strong as it has been in months. With a weaker dollar, Gold would be at least in the $1200 range right now. There is still time. This one will go higher.

Another trade I have just put on is Silver (SLV). Silver is a little different than Gold in that it is more of a bet on a long term recovery in the economy. Silver is used in more industrial applications as opposed to Gold. Gold is much more of a financial trade whereas Silver is more of a big-picture economic trade. I bought the $20 Jan 2010 calls. They are currently trading for about $1.00 per contract.

Do not go overboard with this trade. It is easy to think that you can load up on a ton of calls because they are cheap. Think about this trade in terms of portfolio percentage. While I am very confident you will make a TON of money on this, make sure you aren't putting a large percentage of your portfolio in this or any particular trade.

I will be back tomorrow with more trades. Until next time, stay low risk..

So it Happened..

Just like I said it would except not for the reason I said it would. I told you the market would probably end up higher on the day. The markets were either slightly lower or actually up for the day. I told you that the relatively positive economic data would send the markets higher. That wasn't exactly the truth. The truth is that we rallied on the hope that the government would step in and help homeowners with some sort of subsidy. If we had rallied on the economic news I would have felt good. The fact that we went higher at the end of the day because of the thought of more government intervention, is the sign that the market is still sick.

A sick market does not mean that profits can't be made. It means that profits go to good traders. Not good investors. A good investor looks into the fundamentals of the company and determines a value. They then purchase when the stock is cheap in relation to that value. A trader looks at market sentiment based on charts and volume indicators. They buy at a point when the market is jumping in all at once and profit from the herd mentality. There is nothing inherently wrong with one approach or the other, but in times like these traders tend to be more successful.

That said, I will not be blogging Monday for the holiday. What I will do when I return Tuesday is focus more on the specific trades I am making to help add a little life to your portfolio. Specifically I use an options strategy centered around earnings releases. Options have three types of value. They have time value, which is the amount of time until they expire. Less time until expiration = less value. Intrinsic value is based on how close or in the money an option is. Closer to being in the money = more value. The last type of value is volatility. This is based on how much the stock moves day-to-day. More movement = more value. If you can own options that take advantage of the inherent options value creators, you can put trading odds in your favor. That is what investing and trading are all about. Until next time, stay low risk..

Not so Bad.

After the Geithner all-i-can-tell-you-is-I'm-gonna-spend-a-lot-of-money selloff, the market just hovered most of the day yesterday. And with nice earnings coming out of Coke (KO), a decent jobless claims number and a relatively good retail sales number, we could see some upside today. The futures are still below fair value right now. I think we still can go higher by the end of the day. I think the mentality is so negative right now that ok news can send us higher.

That said, my position in (DIA) is still small and I am looking to add on weakness. We are dangerously close to that November low in the 7600 range. If we break below there, the Dow can have a 6 handle in short order. At that point, we could see some exhausting capitulation volume and head higher. I will still be looking to add to my position on the way down.

We still have a LOT of issues to work out. There are still places to make money. Keep your positons small. Stay quick. And as always, stay low risk..

Keep that Money Comin!!!

How bout that Gold trade so far? Not too bad. Remember, Goldman the other day upgraded Gold and gave it a price target of $1000. That is ALWAYS something to consider. In the beginning of a bull market, Goldman Sachs takes huge positions and manipulates the price higher by 'upgrading' the commodity. The lemmings in the market jump in. Goldman makes money. Funny how that works.

Guess what, I put you in the Gold trade about 6 weeks before Goldman Sachs began to manipulate the market. It was the beginning of the trend. There wasn't much to see in advance of that. The options I told you about are up now about 300% in a couple months. Not too shabby. The trend is just getting started. There are a LOT of profits to still be had in this trade.

The other two major trades I want you to be in are the (TIP) and (TBT). These two are presenting good buying opportunities right now if you're not already in. We are looking at a lot of fear and uncertainty still in the market. People are still buying treasuries very heavily right now. They will stop sometime soon. (TBT) will go higher. Just not right now. You want to get in front of this trend. It is pretty safe to say that we will see higher inflation in the future. With the money the government is printing right now to bailout our zombie banks, inflation is bound to show up. In fact, the government wants inflation. It is easier to deal with than deflation. (TIP) is the way to take advantage of it. Until next time, stay low risk..

Here is the problem..

12:30 PM I waited to post until I heard Geithner speak. I wanted to hear if something groundbreaking would come out before I gave an opinion. I am not sure what I was waiting for. We all got pretty much what we expected. We got a very vague "we will make things right" and not much else.

There was not much in terms of details in Geithner's speech. The most specific detail was how the government-purchased assets are going to be valued. We got nothing, except to say "it's complicated". That isn't exactly what anyone wanted to hear.

The market is off about 300 points right now. It is dancing near the psychologically significant Dow 8000 level. It is going to be interesting to see if it holds. I am putting on a SMALL long position in the DIA. I am avoiding options with this trade because I want unlimited amounts of time to be right. I also want to be able to average down in the trade. I think there could be a dramatic leg down still in the cards. That will mean an opportunity to buy more. If we don't get that leg down, I will still have the small position on. We could very well stay in the trading range and I will look to trim in the 9k range on the Dow.

The Gold trade is still on. It is currently up $20+ on the day so far. I think it continues to head higher. Until next time, stay low risk..

Don't Buy It..

We had a nice looking rally on Friday. The major averages either jumped above or are near close to their 50 day moving averages. While the technicals are beginning to look better, the fundamentals underpinning this recent rally leave a LOT to be desired. The rally on Friday came from the thought that the government stimulus package will be passed. It didn't come from those things that we used to value like earnings, profit growth, prosperity, etc. Remember those?

When we rally because the government is going to redistribute funds in a way that is supposedly going to stimulate the economy, I don't get all that excited. It usually becomes a time to trim some profits.

It looks like we have seen a short term turn in the dollar. We are seeing some weakness against most currencies right now and it is supportive of the market. Remember, the market was at an all time high in Oct 2007, at that time we saw EUR/USD in the 1.40 - 1.45 range. We are now a little over 1.30. It doesn't seem like much right now but 15 points can mean a huge difference.

I could argue that we will come out of this (except for the financials, of course) stronger than we had been before. The last rally to above 14k in the Dow was fueled by almost solely by commodities and commodity stocks. The next time we head higher with commodity stocks because of the weak dollar, we will have strong-balance sheet companies like tech going with it. That will lead to a more broad based rally and more strength overall.

Until then, continue to invest in the overall trend of the market. The trend continues to be a weak dollar and more inflation. Another good way to play this is the (TIP) which is a Barclays ETF that tracks Inflation Protected Securities in the Treasury market. This is a nice way to take advantage of the fact that we will see some pretty hefty inflation down the road. Running out and buying it today will be a little early. We still have some deflationary pressures in the economy. But 2-3 years from now, you'll be kicking yourself if you are not selectively buying this soon. Until next time, stay low risk..

So...

A year is a long time, huh? This time last year, Bear Stearns, Lehman, AIG, WaMu, etc. had not "happened" yet. The market was kind of chugging along. There were some rumblings of an inverted yield curve, a rapidly weakening dollar and some other things. No one had a clue what was coming. The market was off its highs but still hanging in there. There was a thought that some stocks showed significant "value" at at their prices.

Fast forward a year. The bottom has fallen out. Bear and Lehman and WaMu don't exist anymore. Niether do Freddie and Fannie in their quasi public forms. The big banks we have left are nothing but giant black holes for capital. And we got a jobs number this morning that came in near 600k. The funny part about the jobs number is that everyone in the market said, "OK, bad... but not so bad" and the market headed higher. Long time.

So the question for an investor is where do we go from here? The constant answer is do a little of what everyone else is doing. You need to be trading this market. Buying and holding stocks as an asset is not a good option anymore.

The area I have been looking at recently is in commodity stocks. They have had a nice little rally so far and I think they can move higher. The dollar is weakening right now. This is helping the market overall and commodities in general. There will still be some weakness in oil, but keep an eye on commodities for a mid term trade. I think there is a lot to go there. Until next time, stay low risk..

All About Children...

I was explaining to someone the other day that most of the Wall St. CEO's are simply acting like children. I have two toddlers so I know the typical actions of a child first hand. The one that comes to mind is when my kids are fighting over a toy and they are saying "MINE!". That is exactly what we are seeing with CEO's across the financial world. They are all saying "MINE!" when it comes to salaries and perks and stock, etc. Now is the time for leadership. Not child play.

Among the most evil of all these people is John Thain from Merril Lynch. I am not going to go into all the things he used Merril money for his office, but suffice it to say they would make you want to throw up. I understand having a fund manager there and your job is to make them buy some stock. But if I am a truly savvy fund manager, what am I supposed to think if the CEO is wasting shareholder money this way? The most aggregious part of this particular theft is that is was all done while Merril was losing BILLIONS. This was not just an error in judgement. This was theft.

The other part of Thain that will make you want to throw up is that he wanted a $10 million bonus this year!? Is he serious? The official press release said that he told the board that he didn't actually want the bonus. Of course that was a lie.

What makes the bonus discussion more disgusting is that there is new information coming out today. The information from the Wall St Journal is that Bank of America was essentially forced to buy Merril. The sale of the company was what Thain was basing his "I deserve a bonus" discussion on. He did nothing! The government twisted their arm! Disgusting.

One other quick piece of info. Goldman Sachs just raised their price target on Gold today. What does this mean? It means that Goldman is not in the Gold market big time. Do not pretend Goldman is an objective player. They do this all the time. They were doing with oil prior to the bubble bursting. They were in the market buying oil hand over fist then they were raising the price target. Goldman was essentially silent as they sold huge portions of their oil holdings in July. The market collapsed. Then they downgraded their price target. Guess what is happening now with Gold. I recommended it about $150 ago and there is still time. You missed a small move so far. I think it goes much higher. Get in and buckle up. Until next time, stay low risk..