Wednesday, December 26, 2007

Friday, December 21, 2007

Trading and investing /market update

Dear friend,

I am now ready to accept questions you might have about trading and investing...

Until I get specific questions let me discuss the current state of the markets:

Headline news these days is about price inflation worries. The prices of many things keep going up. We see it in the prices of many commodities. We see it in the prices of food and health care and insurance. No one believes the government's official numbers anymore. But even these doctored numbers are showing that inflation is rising.

The market worries that the Fed won't be able to cut rates much anymore. So down she goes. Not that rate cuts would save this market anyway. Look at what happened during the last rate-cutting campaign: The S&P 500 still lost 45% of its value.

I think the market will be rough for a while here. There are more write-downs from banks coming, more credit troubles and more weak earnings reports from financial stocks. Then there is the spillover effect, as housing and mortgage troubles extend to other areas. Lots of bad news, and where the market will go is anybody's guess.

Instead of guessing which way the market might go, I think it's better to focus on things you can control.

When I make a buy recommendation, it's for fundamental reasons, and I plan to hold onto the business for awhile.

If you're interested in fre*e stock picks go to my website at and sign in now because the weekly picks won;t be fr*ee much longer... Consider this my introductory gift to this new blog...

About investing these days, considering we are facing some important divergences ( recession vs inflation) I wouldn't invest all my money in one shot in any investments at this time. Invest in solid companies (fundamentally) but go at it slowly. In other words: average up...

If you like to trade based on technical indicators, be alert and use tighter stops than usual.

Yours truly,


Eric LeRiche