Monday, June 12, 2006


Friday, I received an interesting email from John Mauldin. John is the author of Bullseye Investing and Just One Thing he does a excellent job of pulling together the thoughts of professional money managers.

Friday, Mauldin included comments about the state of the worlds many stock markets. he put together a list of 64 markets and not a single one was sitting on new highs. The worst of the worst were Dubai and Saudi Arabia, down 58.5% and 43.3% respectively. The US market as measured by the Dow Jones Industrial Average is only down 6.4%.

For a couple of months, I have encouraged you to sell international stock mutual funds, including any you might own in your IRA's or 401-K's. These markets have fallen so hard that various advisors, including BCA Research and Ned Davis Research suggest that there might be a bounce ahead.

I have said it before and I will say it again, when a rotation comes, you should buy relative strength. In other words, the US market by being down only 6.4% is showing a lot of strength. Money that is scrambling to get out of international funds is flowing to the relative safety of the US markets. My Dad served 6 years in the Navy during WWII. He was fond of saying that it takes time to turn around a battleship and once it turns it will likely go a long way before it turns again. I would not play the bounce.

Also note the huge decline in the stock markets of oil producing countries. The markets are forecasting a decline in oil prices. The "bounce" ahead should be good news for your account. I hope you have fully adjusted your asset allocation to reflect the turn in the business cycle. Please write or call (336-778-0543) if you want to discuss actions you can take that will make money for you over the next few years.

Some of the folks on our list have not opened accounts. I invite you join me in making plans to buy Myrtle Beach Real Estate at depressed prices. If you know of someone who might be interested, forward this email to them. The list will occasionally be pruned of those who have not "shown us the money".