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My Embarrassing Investment...By
Thursday, June 15, 2006
"A pair of small Chinese [centuries old] porcelain vases at Northeast Auctions in New Hampshire this August, with a presale estimate of $400 to $600, fetched $545,000." -Forbes, December 26, 2005 Why Chinese ceramics? One reason is, newly minted Chinese millionaires will probably come looking to buy up their history. Another reason is, absolutely nobody is talking about ceramics. A third reason is, I'm embarrassed to tell you that we're looking... so it must be worth a look! None of these are the reasons we started to look in the first place. Ultimately, what drove us to look at these is this: Chinese ceramics were the one big winner near the top of The Big List. What's The Big List? The Big List has been our cheat sheet for the last few years... The idea behind it is pretty simple. We're buying up what worked during the last generational switch. Let me explain... After the big stock market peak of the late 1960s, gold, coins, commodities, and other assets (including Chinese ceramics) started to soar. Here we are, a few years after a stock market peak once again, and the exact same things are working. It's uncanny. Take a look:
It really is crazy. The exact same things that did well in the 1970s have done well again, practically in the same order. I believe there's plenty more to come... Why? They say history doesn't repeat itself, but it rhymes. The last time around, these things soared because of fears of inflation. Commodities rose because the dollar was falling. This time around, it may be supply driven... As Jim Rogers says "Do you know anyone who's opened a lead mine in the last 20 years?" How about a sugar plantation? How about a coin shop? This time, commodities and the rest of this stuff will rise as people look for an alternative to stocks, and see prices moving up here. Tom Dyson, my DailyWealth co-editor, who's good at challenging my investment ideas, came into the office yesterday saying, "Oil is tanking. Gold and silver are too. Is copper next?" Even if it is, I'm not worried. The list above is our cheat sheet for the next ten years. From 1972 to 1981, stocks were horrible performers. And the things above did well for another eight years after 1972. It'll be a rough ride, but we'll try not to get bucked off, and give it time to develop. Then in ten years, when everybody loves basically everything on The Big List, we sell. We get out of our Big List holdings, and we buy stocks. Good Investing, Steve Market NotesTHE S&P 500 NEARS A HISTORIC LANDMARK Three months ago, DailyWealth wrote about a small landmark in stock market history. The landmark occurred on March 15, 2006… and it always precedes a plunge in the S&P 500. The milestone? The stock market had gone three years without a correction. With the S&P 500 closing at 1230 yesterday, we’re down 7% from the high set on May 9. From here, the index needs to fall another 37 points to complete its 10% correction and prove our indicator right... Over 3 years of smooth sailing… the S&P 500: |
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