Market Strategy - Capitalism in Action
“You have a choice. Live or die. Every breath is a choice.
Every minute is a choice. To be or not to be.” Chuck Palahniuk
In This Issue:
- Strategic Resources/ News
- Surfing the Markets
- Unsung Heroes
Strategic Resources/ News
For up-to-date news on Market/ Technology Insights, see my twitter postings:
- Ignore the Predictors: Being “Right” vs. Making Money
- Excellent News Consolidator: Finviz
- ETF Daily News
Surfing the Markets
Let’s look at the state of the markets (as of 11/09/10)
The U.S. Dollar is still in a downward slide, ever since early June (with a
slight pop in August, that reversed course at the end of the month). Yet, the
Dollar is still fighting hard to regain lost ground, slicing through the 20-day
The Yen is still beating up the U.S. Dollar, although is refused to dip below
80 and climbed a few points from its’ low. On the Euro front, the Euro climbed
over 140, but couldn’t hold its ground, also dipping a few points.
For the most part, U.S. Treasury rates continue declining when looking at the
bigger picture. However the 30 year is seeing a spike in its rate. From a low of
about 3.6%, it’s now over 4% and is still rising.
What can I say? Bernanke poured gas on the fire and commodities soared in
response. CCI/CRB up, Oil up. Copper is surging. And, of course, Gold and Silver
are racing for the sky.
Stocks are also surging upward, although there does seem to be some downward
pressure which may simply be limited profit-taking or the bears may be onto
Overall, the market is responding like clockwork to the plan for Quantitative
Easing. Risky assets are surging upward in response to the extra money expected
to be pumped in over the coming months. One fly in the ointment though is the
30-year treasury rate spike. The FED may end up fighting harder than expected to
keep interest rates low – especially if it entertains any hope of stimulating
the housing market enough to make a difference to the U.S. Economy.
Competitive Battles/ Disruptive Innovation
There is a huge competitive battle waging in the world markets, and that is
the war over currency values. The United States kicked off the show with its
Quantitative Easing, round 2. The Bank of Japan intends to fight back to keep
the Yen from rising too much. China, the alleged scapegoat of many of America’s
woes, also refuses to sit still and watch the Yuan rise too much
World currencies are relative. There will be winners and losers, period. In
all likelihood, despite the FED’s best efforts, to push the U.S. Dollar lower,
other leading countries will not allow their currencies to appreciate too
wildly. However, if the U.S. continues to embark on loose policies, the Dollar
may indeed sink; in a not-so-good way.
Financial Markets are constantly in motion. Therefore, keep looking at the
BigPicture to see which way the prevailing winds are blowing. Best of luck in
trading the markets. Stay tuned as we discuss more about Capitalism, Market
Strategies, and Trading in future issues.
Unsung Heroes , The Rich (and those who aspire to be Rich)
Both these pieces peaked my interest and made me really think about:
Why are the rich hated with such fury? The United States of America was
founded on the principles of Life, Liberty, and the Pursuit of Happiness -
except when it comes to the rich, or those deemed to earn too much.
Take the heated debate over the Bush-Tax cuts set to expire on December 31st of
this year. As the debate rages on, many politicians call for the continuation of
those reduced rates for those making less than $250,000, but not for those
making more than $250,000 (aka the Rich).
Repeatedly we’re told by academics, politicians, and yes … even some
business people that the rich should pay more, just because they have (aka Earn)
more. It’s as if those who are the most productive are obligated to share their
hard-earned money with all those who ask for it. The key word is
obligated. Generosity is most honorable and Americans in general are
already generous in their giving. The disgrace is when force (all government
actions are backed by force) is used to take from those who produce and
redistribute that money to others – both rich and poor. Wall Street bailouts
took money from those who acted with restraint, and rewarded those who acted
reckless. Social Programs redistribute wealth with gross inefficiency, yet are
regarded as sacred cows – untouchable no matter the cost.
What bothers me the most though is how a country once founded on the
principle of upward mobility based on the freedom to pursue riches is drifting
closer and closer to the collectivist mentality - best illustrated by Milton Friedman.
Here’s a series on Individualism vs. Collectivism that I found of great interest.
Business professionals are nearly always portrayed by the popular media
(movies, television, etc.) as wicked. In generating profits, they are evil.
Business people are almost always cast as the villain. Sometimes they’re
portrayed as normal but almost never as a hero.
However, seldom do the masses feel compelled to subjugate themselves to
world standards. Truth be told, most Americans are rich compared to those in
most parts of Africa. Even the most poor in America live like royalty compared
to the most devastated places of Africa – such as the Congo, Sudan, and
Ethiopia. Being Rich, shouldn’t Americans be compelled to give to those
in Africa who are Poor?
Being Rich should be held in high esteem – so long as the money is earned -
as contrasted with being stolen, either individually or with the help of
government. Money that is earned belongs to the person who produced the good or
Those who pursue wealth create the innovative products and services that make
living in these times so great. Imagine a world without Digitization! Bill Gates
and Steve Jobs were leading innovators in ushering in the Personal Computers.
CDs & DVDs are rapidly being replaced by digital streaming. Books are being
digitized with great speed, replacing entire backpacks full of books with
devices weighing less than a pound.
And what happens to the excess wealth that’s created. Some of is
spent on luxuries – thus creating jobs for those working to deliver those
products/ services. Some excess wealth is given to people in need -
shame on the wealthy for giving their money to others. And of course, some of
the excess wealth is invested in existing and future business
enterprises – how dare those who create wealth help generate more wealth ;-7
All material in Byvation is for informational purposes only. Any and all
ideas, opinions, and/or forecasts, expressed or implied herein, should not be
construed as a recommendation to invest, trade, and/or speculate in the markets.
Be advised that Michael Davis and/ or Brencom Business Technologies, Inc. will
not be held responsible for any investment actions that you take as a result of
any information mentioned in Byvation.
Please share Byvation with your friends and colleagues.
“Do not let your fire go out, spark by irreplaceable spark. In the hopeless swamps of the not quite, the not yet, and the not at all, do not let the hero in your soul perish and leave only frustration for the life you deserved, but never have been able to reach. The
world you desire can be won, it exists, it is real, it is possible, it is yours.”
- Ayn Rand, Atlas Shrugged
4621 S. Cooper St., #131-289
Arlington, TX 76017
© 2010 Brencom