Tuesday Morning June 12, 2012
Bill Gross at PIMCO has become a counter trend guru. This morning Bloomberg announced PIMCO has increased its Treasury holdings to 35% in one of their funds. He is doing this at the very top of the bond market. He has reliably gone the wrong way at each major turn the last couple of years. One wonders how PIMCO became a bond guru.
So there is one reliable indicator.
Goldman sees a 29% rise in commodity prices the next few months. One of course can only know that Goldman is their own best client, but again perhaps unlike Bill Gross maybe they are reading The Market Perspective.
All in all,
The markets will not reward those on the wrong side as Gross is, all the individual investors who have scurried into bond funds will have to be lured back into the stock market.
Watch gold, it is over 1600 this morning, higher lows in GDXJ and CEF.
XME and XES continue to look good. OPEC meets which has really nothing to do with the price of oil. Watch the dollar instead, the Euro is slowly reversing as we have shown.
In class yesterday we were I showed the MSFT cash flow statement. MSFT is borrowing money. The reason is that MSFT does not want to pay a 35% tax on repatriated profits brought back from overseas. If the Government really wanted a free economic stimulus package, it would allow a tax holiday on money brought back to the US from overseas in 2012. This would bring billions back for investment in the private sector, but of course that would take from needed government programs, remember it's government that is in trouble according to the Administration.
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