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Stock Ideas Investors Daily Edge Not Even Crack Heads Can Escape this Economy
Stock Ideas Investors Daily Edge Not Even Crack Heads Can Escape this Economy 
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| The daily charts of the Nifty indicate a bearish trend. The long bearish candle of 175 points was a huge loss. The Nifty unable to close above the 4,600 level. | |
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| Not Even Crack Heads Can Escape this Economy |
| Saturday, 18 October 2008 | ||||||||
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Everyone’s having a hard time in this economy, even crack heads. We’ve all been talking about how wicked inflation has been over the past two years. Apparently Gus Young Jr. of West Palm Beach wasn’t listening. In a fit of rage, he destroyed a DVD case and a Plexiglass counter after his friendly neighborhood drug dealer told him that the price of a rock of crack cocaine had gone from $10 to $20. And get this: on the way to jail, he shared his displeasure of the inflated crack prices with officers. Let this be a lesson that nothing escapes the reach of inflation. Not milk, butter, or in this case, crack. _______________________________________ McCain “thinks” he’s in favor of free markets. I say “thinks” because he made contradicting statements in last Wednesday’s debate. First, he said that the government should set a “floor” for housing prices. Then a few minutes later he said, “I oppose subsidies for ethanol because I thought it distorted the market and created inflation”. So let me get this straight. McCain is worried about distorting a very small part of the American economy (Ethanol production), but is in favor of heavily distorting one of the biggest parts, housing? That’s like saying you’ve gone on a diet except for your high sugar intake. If you don’t let housing prices correct and instead have the government buying mortgages at asking price, then you CREATE INFLATION. ________________________________________ Don’t get angry that they did THIS with your money. AIG couldn’t survive without the government’s help, but they apparently had nearly $550,000 for two resort trips for executives and top tier clients. But wait, it gets even more sickening…
One executive received a golden parachute of $15 million on top of his $5 million bonus. Another previous executive was allowed to keep his $34 million bonus (on top of the $1 million per month he received until just recently). Thankfully, the New York attorney general is demanding the company recoup those bonuses, unless they want the State of New York on their ass. It makes you think long and hard about what the heck these sleaze bags in DC are actually doing with that recently approved $700 billion bailout. ________________________________________ IDE Reader Woody W. asked the one question on every gold bugs mind. Charles, Do you have plans to discuss the “worst case scenario” of when the American economic system and the Dollar actually FAIL? At least do a “what if” paper on the possibility that the American Dollar becomes TOTALLY worthless. There are still some options open to us even at this late date to at least provide sustenance in an ‘anarchical’ world. This sounds like a fun mental exercise. So let’s run with it. Considering that every other country depends on U.S. Dollars (it is the reserve currency after all) the whole world would be screwed. Riots would break out, tyrannical leaders would take power, wars would be more common, rationing, practically everything bad that you could possibly imagine would happen. We’d probably have to learn to tolerate “fried rat tail” with a hefty helping of random tree leaves and dirty water. In that situation you better… 1. Learn how to protect you and your family. Get a gun. Learn Karate. Whatever it takes. 2. Make sure you have a stockpile of food. Canned goods and Twinkies will last a long time. 3. Bury lots of gold and silver so that nobody can ever find it. The deeper, the better. ________________________________________ Andy Gordon’s contradicting himself. Your Tuesday editor is a staunch income investor. Heck, he has an income investing service that highlights cash rich companies that pay steadily increasing dividends. But a few months ago, he noticed something interesting. Certain companies that cut their dividends go on to see substantially lower share prices about 92 percent of the time. Now, you can’t expect that to happen to every company that cuts their dividends, just select ones. So Andy started a service called The Red Flag Insider which highlights these companies for readers. And so far, it’s been a huge success. At the end of last week, his two positions were up well over 50% (in about 36 day's time). He tells me, though, that he can’t wait for the next batch of companies to cut their dividends. He says that one sector has really taken a massive hit since the credit crisis. These companies are going to cut their dividends trying to save up cash. But that won’t help. Their battling massive market forces. And they can’t get a government bailout either. I’m sure anyone playing these companies is sure to make a killing. I’m talking about Bear Stearns-puts kind of killing. If you want to be alerted when this group starts cutting dividends, click here. ________________________________________ I hope you enjoy this format. But it’d be even better if you took two quick seconds to let me know by sending a personal e-mail to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Stay free, Charles
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