Never buy a TV guy's stock picks. They've already gone up by the time you hear about them, and if you do your own due diligence on those picks after you hear of them you have missed the move completely.
Right now James Cramer is the most popular TV stock picker out there. And last week, in New York, he got Prechterized. By that, I mean he sounded a warning as any ever uttered by Robert Prechter, the Elliott Wave theorist I wrote about earlier this week.
Cramer's bearish analysis isn't based on waves, like Robert Prechter's bearish analysis. It's based on the performance of the Bush Administration. (Cramer also seems to admit in the column that he's a Democrat, so if you're not, you now have your excuse to ignore his advice, analysis, TV show, columns, and Web site.)
Cramer is scared, which should scare you. In his column he recommends a gold stock called GoldCorp, a minerals trader called Rio Tinto, a French oil outfit called Total, a South African energy technology outfit called Sasol, and the Fording Canadian Gold Trust.
I don't know about any of these outfits, but there's a trend here. They're not from the U.S. They deal in hard assets. They're hedges against our inability to sell new debt and the inflation that would result from that.
After comparing Bush to Lyndon Johnson (for his guns-and-butter fiscal policies) Cramer sounds an awful lot like me:
If the Chinese decide to be good communists and stop buying our bonds, the Feds will have to raise rates to attract new investors and the reaper will be at our doorstep with interest rates more akin to those of South than North America. Right now, it’s not a problem. But in a year or two or maybe less, I perceive that the government will throw a bond auction and nobody will show, including the Chinese, until rates shoot up dramatically.
If that's not a warning to walk, don't run to the exits, I don't know what is. And when a bull says bear, you better take notice.
Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. David Chastain on October 7, 2005 05:29 PM writes...
I consider myself an Elliotteer, having read Prechter's books on Elliott Wave Theory and Socionomics.
EWT is about probability of outcome based on cycles in the major stock markets.
The two key concepts to "bear" in mind are "global liquidity crisis" and "asset deflation."
The world has gone mad using debt to bid up the prices of things: stocks, bonds, real estate, collectables, baseball franchises, stock exchange seats, etc.
There comes a point where the heard will have realized that it cannot handle the debt. That's the point when the big sell off of things begins.
"The value of a thing is the price it will bring" and the more things for sale, the lower the price.
Look at David Tice's Bear Fund (sym: BEARX) and apply EWT. If it has not bottomed, it's about to.
Hang on to your 401K's!
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Nokia 6820-- US$110
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Nokia 7210 Turquoise-- US$100
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Nokia 7250-- US$120
Nokia 7250i-- US$120
Nokia 7260-- US$135
Nokia 7280-- US$155
Nokia 7600-- US$165
Nokia 7610-- US$195
Nokia 7650-- US$160
Nokia 8250-- US$65
Nokia 8310-- US$90
Nokia 8910 Titanium-- US$160
Nokia 8910 Black-- US$165
Nokia 8910i-- US$185
Nokia 8890-- US$115
Nokia 8800-- US$220
Nokia 8850 Special Edition-- US$105
Nokia 8850 Gold Edition-- US$120
Nokia 8855-- US$125
Nokia 9210 Communicator-- US$195
Nokia 9210i Communicator-- US$195
Nokia N-Gage-- US$110
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Nokia 9500 (communicator)-- US$210
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Sony Ericsson T200-- US$45
Sony Ericsson T230-- US$55
Sony Ericsson T300-- US$55
Sony Ericsson T310-- US$50
Sony Ericsson T600-- US$69
Sony Ericsson T610-- US$130
Sony Ericsson T630-- US$135
Sony Ericsson T68i-- US$105
Sony Ericsson T68m-- US$110
Sony Ericsson Z200-- US$100
Sony Ericsson Z600-- US$170
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Sony CMD-Z5-- US$90
Sony CMD-MZ5-- US$155
Sony Ericsson R520m-- US$100
Sony Ericsson R380 World-- US$90
Sony Ericsson R380s-- US$105
Sony Ericsson R600-- US$35
Sony Ericsson S700-- US$175
Sony Ericsson K500i-- US$180
Sony Ericsson K700i-- US$189
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Samsung SGH A300-- US$40
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Samsung SGH C100-- US$85
Samsung SGH E400-- US$125
Samsung SGH E600-- US$129
Samsung SGH E700-- US$130
Samsung SGH E715-- US$155
Samsung SGH-E810-- US$140
Samsung SGH-E820-- US$150
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Samsung SGH-E850-- US$140
Samsung SGH D410-- US$150
Samsung SGH D500-- US$155
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Samsung SGH N288-- US$60
Samsung SGH N500-- US$60
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Samsung SGH P400-- US$140
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Samsung SGH P500-- US$155
Samsung SGH Q105-- US$40
Samsung SGH Q300--- US$70
Samsung SGH R220-- US$30
Samsung SGH R225-- US$25
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Samsung SGH S300-- US$105
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Samsung SGH S500-- US$109
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samsung SGH S105-- US$35
Samsung SGH T200-- US$125
Samsung SGH T400-- US$60
Samsung SGH T500-- US$90
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Motorola A388c-- US$120
Motorola A820-- US$65
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Motorola C333-- US$35
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Motorola Timeport 280-- US$80
Motorola T190T-- US$25
Motorola Talkabout 191-- US$25
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Motorola V60i-- US$75
Motorola V70-- US$105
Motorola V80-- US$115
Motorola V290-- US$80
Motorola V750-- US$125
Motorola V3688+-- US$20
Motorola V8088-- US$30
Motorola V525-- US$139
Motorola V300-- US$130
Motorola V400-- US$125
Motorola V500-- US$130
Motorola V600-- US$140
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Siemens A50-- US$25
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