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We’re getting ready to buy, StormWatchers,
…but I remain very concerned—about you.
I’m getting lots and lots of questions (thank you, I’ll get to a few in a minute), and what I’m seeing behind many of your questions is a bad case of itchyitis. As in itchy fingers.
Not blaming you. Just noticing.
Let’s clear this up, once and for all: First must come the TOTAL CAPITULATION. It’s close.
Your job now: Clean out the losers in the next few days.
View across the valley: good. An Obama rally—maybe 30% in as many days. But if you move now, you’ll be lucky to come out even.
WHEN WE BUY—THIS IS
HOW WE’LL BUY
Normal skipped town a while ago and left no forwarding address. Don’t expect him back anytime soon.
The bear is here but bear rallies can be great wealth-makers—if you’ve got the right mindset.
The core of my Simple Profit System is this: Slam out profits day after day during rallies… stay out of the way of the slumps… and never, ever wait for a bull market.
And that’s a good thing because… you may have to wait another 7 years for a real bull market!
Here’s a little history lesson:
Huge rallies occur with surprising frequency and predictability during “secular” (long-term) bear markets.
Did you know that?
And my Simple Profit System has been designed to turn these rallies into fabulous profit bonanzas for you.
CATCH THE RALLIES!
During the Crash and Great Depression of 1929 — 1932, the Dow lost 89% of its value. Yet you could have made:
- 18% profit in October 1929
- 48% profit in April 1930
- 23% profit in December 1930
- 27% profit in June 1931
- 35% profit in October 1931 and
- 25% profit in early 1932!
Same thing happened when the tech bubble broke in 2000.
The Nasdaq dropped 78% between 2000 and 2002. Yet you could have made 16% profit or more SEVEN TIMES between April 2000 and July 2002! Indeed, in 3 separate bear market rallies between 2000 and 2002, you could have made 35%—44% profit!
In all these cases, the rallies were sharp—lasting weeks rather than months. But if you pay attention, well, a 44% profit in a few weeks is not a bad thing, I’m sure you agree!
Individual stocks did even better, as you may recall. Cell Therapeutics rose 544%, Fuelcell was up 448%, Quest Diagnostics was up 365%.
So: get ready for rallies of 30% in as many days to rock the markets in ‘09—followed by market plunges that happen even faster.
 WHAT YOU MUST DO: This is no time to be a buy-and-hold investor.
You must buy stocks that are cash-rich throw aways. And you must sell them as they rocket up in months—or even weeks.
But you must never marry them!
Promise me.
YOU HAVE QUESTIONS
—Income, Gold
Tom D.: Richard, I’m 66 and need to generate monthly income.
Richard D.: Guidance on MLPs, Richard?
Tom and Richard, go for Kinder Morgan Energy Partners (KMP), yielding almost 8%. It’s a master limited partnership specializing in pipelines. Good access to credit. Pay up to $53. Make KM the cornerstone of your monthly income plan. Look for more on dividends next week.
Richard S.: Will inflation carry gold to $2,000 like Citigroup research says?
Bernie K.: Should I own precious metals companies?
Inflation’s mixed into the stimulus package like vanilla in vanilla ice cream. There’s just no way around it. But don’t buy gold — at least not yet. It’s for trading, not buying right now. I’ve made good money on gold this year -- 32% on a basket of mining stocks. But I only needed two weeks to do it! Yes, gold’s going up long-term, but you know what they say about the long term.
Let me get out of your way—you’ve got some selling to do.
Richard
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