Bubbling Over

The housing bubble is the most publicized and anticipated panic ever reported on...remember we have been hearing about it now for over three years. Now the private equity bubble and the emerging market bubbles are coming too...amazing everyone is a bubble expert...one thing for sure almost all investors are far too short term oriented and trading the trend of the day. Computers represent a clear majority of volume on the global exchanges, pension and endowment funds are being guided into the private area by very inexperienced "consultants."

The only real way to make tax efficient money any more is to be a true contrarian and avoid the herd mentality. The herd is buying at the with market held orders and selling the same way. Our older expert friends are amazed at the recklessness...of the way money is managed today.

This is in part because of the global instant communications and gratification needs of today's traders. So in summary...you have to know what own, be prepared to buy on severe weakness and hold through cycles of the market. Turn over now for the average stock on the NYSE is only a few months....Almost all the over paid managers today are exceeding 100% turn over and under performing the markets. When the trend changes everyone runs for the door.

As taxes and the cost of money is rising around the world this will only make it harder to get an after tax return on your savings..the key!

A Morgan Stanley expert had the following observation last week, "Our gut tells us that investors are selling liquid positions to fund illiquid ones to avoid taking losses after the recent down draft." This is critical....remember there is over $4 trillion leveraged long positions from the yen carry trade alone that is relatively illiquid...so when hard equity starts to get erased the remaining longs get very painful and that causes further selling....

Danny Boy seen here is ready for his first spring break. He knows the left centered media has so much distortion in the news right now he is turning away from it a for awhile!