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My weekly S&p500 timing model is still showing elevated volatility levels but a major easing off the insane levels from last year. While this is a major improvement, we are still not out of the woods. The real bottom isn't here yet and I expect a little more pain before everyone throws up their hands and capitulates. Overall the model remains in BUY mode from 11/14/08 and I've been adding more money to my 401k and IRA's as a result. I have one last slug of $$$ left to drop into the markets when this last "pain event" occurs. I also added some shares of GE, JNJ, and TX to my long term holdings. I will looking to add more stocks (domestic and foreign) across the board this year and I'm busy using my AAII stock scans to find those canditates! ...

Ayn’s philosophy of Objectivism is pretty tough to swallow if you’ve never been exposed to it, but its the only thing that cuts through the BS today. She’s a follower of Aristotle and reason, and boy do we need more of that today! I watched the entire 5 part series, and I suggest you do as well! UPDATE 2019: I wanted to chime in here that it’s 2019 and I’ve spent the last 10 years thinking about Ayn’s philosophy. I find it completely misguided. If everyone is selfish and chasing money, you end up exploiting the Earth and marginalized people. That’s just not right. Take a look at the current Political environment. I rather favor Stocism over her philosophy now and I admit I was WRONG. Still, this post should serve as a reminder. ...

Dear Mr. President, I know it’s really easy to spend other people’s money but let’s face a reality here. No matter how much money you’re going to throw at the banking and credit system, it just won’t work. The banks are, for lack of better word, bankrupt. They went bankrupt because they were built on a shoddy financial foundation and took excessive risks. Now you want to continue to use MY TAXPAYER MONEY to keep feeding these pigs? Heck, you don’t even know [HOW]{.small-caps} [MUCH]{.small-caps} [MORE]{.small-caps} [MONEY]{.small-caps} it will take to solve the problem! Emphasis mine. ...

Many readers know that I’m a big fan of Ayn Rand, objectivism, and of course capitalism.  I was thrilled to find this well written WSJ article a few weeks ago and it seems appropriate to share it with you now, given the current Obama economic bailout plan.  In the book, these relentless wealth redistributionists and their programs are disparaged as "the looters and their laws." Every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the "Anti-Greed Act" to redistribute income (sounds like Charlie Rangel's promises soak-the-rich tax bill) and the "Equalization of Opportunity Act" to prevent people from starting more than one business (to give other people a chance). My personal favorite, the "Anti Dog-Eat-Dog Act," aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn't Hank Paulson think of that? ...

Many readers know that I’m a big fan of Ayn Rand, objectivism, and of course capitalism.  I was thrilled to find this well written WSJ article a few weeks ago and it seems appropriate to share it with you now, given the current Obama economic bailout plan.  In the book, these relentless wealth redistributionists and their programs are disparaged as "the looters and their laws." Every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the "Anti-Greed Act" to redistribute income (sounds like Charlie Rangel's promises soak-the-rich tax bill) and the "Equalization of Opportunity Act" to prevent people from starting more than one business (to give other people a chance). My personal favorite, the "Anti Dog-Eat-Dog Act," aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn't Hank Paulson think of that? ...

For those of you who don’t like using YALE, now called RapidMiner, I offer you neural nets in Excel. A few years ago I came across a slow, but really cool neural net application written in Excel by a PhD student, Angshuman Saha. I’ve used this little spreadsheet to make quicky models and see curve relationships. It’s easy to use and the instructions are straight forward. Check out the author’s website, he offers a classification spreadsheet and other fun models. ...

When I was in MBA school, I had a professor who was always looking for a “hot stock” tip. He knew that I had my ear to Wall Street and asked me if there’s anything good to buy out there. At the time I remember reading something about Toyota and liking it alot. I told him that I was thinking of buying Toyota (TM) for my 401K. He did, I got distracted and didn’t, that was Fall 2003. This trip down memory lane was jogged when I went through Wallstrip’s archives and came across their Toyota video. I thought to myself, what ever happened to TM after my tip? The short of it was Toyota took off like a rocket, er car. ...

In my Random Thoughts About Trends post from a few weeks ago, I wrote about my belief that Alternative Energy will become a long term trend. I did say that I didn’t know enough about this industry to pick a future winner. It’s rather confusing when you have all sorts of forms of alternative energy such as: solar, wind, bio-fuel, and who knows what else. I then stumbled across an old episode of Wallstrip that profiled Solar Energy. I thought to myself, this might be a good starting place to get some information about solar energy related companies trading at all time highs. Wallstrip highlighted First Solar (FSLR), Ascent Solar Technologies (ASTI), and Trina Solar (TSL). I did a quick check of these companies and found that First Solar has a PE ratio of 300+ and trades at $68, Ascent Solar has no earnings and trades at $7, and Trina Solar has a PE of 50+ and trades at $46. FSLR and TSL, from a valuation stance, are way too rich for me and they probably have a lot of a “hate oil” premium added to their share prices. ASTI has no earnings so maybe $7 is about right, then again maybe it should be lower! So what to do? Well I’ll do more DD (due diligence) on these three and work my way into this market place. Perhaps there’s a better and unloved company out there, waiting for its day in the sun! ...

The month of May has turned out to be a painful one for me and my Forex trading account. I didn’t trade as much as I did in previous months, instead I opted for more of a “swing” trading strategy by buying on dips. That strategy proved to be a bit hazardous to my profits. The EURUSD sold off from its second test of its all time high and then dropped down to the $1.34 level. I began to average down and prune some over-leveraged losers in the process. I continued with this crazy strategy because my neural nets continued to flash “BUY” signals. I didn’t become concerned until last week when the model started flashing “RANGE.” This signal indicates a possible price holding pattern in the currency pairs OR a possible trend change. Right now I’m still long 603 units of EURUSD at an average price of $1.35377; the currency pair is trading at $1.34885. :) [tags]Forex, AI, NeuralNets, Currencies, Trading, Euro, Dollar[/tags] ...

If the world follows the typical supply and demand economic theory, we are about to witness the beginning of a major global rally. The Chinese government recently loosened laws allowing its banks to invest indirectly in foreign equities and derivative products. China currently sits on $4.8 trillion dollars worth of reserve assets, of which it wants to slowly inject a percentage into the global markets over the next several years. The end result will be more money chasing fewer assets and prices going through the roof! I’m glad I’m long all the way in our 401K’s. The trick will be to get out right before the party ends. Related: China grants Blackstone $3B to invest abroad (via CNN) ...