Saturday, July 11, 2009
From a reader: Thanks for the link to the article about Goldman Sachs. I don't know if every thing in the article is true, but if only half were true they should all pay for their crimes... How does one fight a beast like Goldman?
They can't suck you dry if you don't serve them your blood with a smile and a thank you. The way you fight a beast like Goldman is by not being a gullible idiot.
If everyone who presently holds publicly traded common stocks sold anything he didn't truly understand, Goldman's share price would go to zero. Same goes for Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, and probably several dozen others. They're too complicated. Nobody knows them well enough to buy them.
If you want to beat Goldman Sachs, remember what libertarian writer Harry Browne told his daughter: Nobody owes you a thing. Goldman Sachs doesn't owe you a thing. They're in business to take as much profit out of securities markets as they can, however they can. You want to beat them? Learn to do the same.
You want the Goldmans of the world to go away? Just think for yourself. That is your only recourse. The law can't do it. The regulators can't do it. Nobody at Stansberry can do it for you, though we publish quite a few ideas each month that can help you out in that department. Ultimately, it is your burden to bear. And you bear it alone, just like the rest of us adults.
I don't excuse Goldman or any other den of Wall Street thieves for their truly despicable, larcenous behavior. But neither am I naïve enough to pretend that isn't how such people have always behaved and always will behave. You and I and that thundering herd of so-called investors out there... we're all totally out of excuses. It's up to us, not "them."
If you want to know how I plan to beat Goldman Sachs and its ill-intentioned ilk to a fine, bloody pulp, read the next issue of Extreme Value, which came out yesterday afternoon. Just to get started, I've found yet another doomed financial institution that owns too much garbage.
If you have large sums of money in publicly traded stocks and bonds and don't start reading Extreme Value over the next couple of months, I'm fairly certain you'll regret it by the end of the year. Click here for information on how to access my reports.
General Motors will soon leap out of the frying pan of bankruptcy and into the fire of government ownership. The U.S. government will own 60.8% of the new GM, the Canadian government will own 11.7%, and the United Auto Workers health care fund will get 17.5%.
Judge Robert Gerber of the U.S. bankruptcy court in Manhattan said, "If GM were to have to liquidate, the injury to the public would be staggering." Less staggering than having it run like the Post Office? We'll soon find out.
We wrote it, did you short it?
Given our total debt already exceeds $10 trillion, it seems improbable this level of deficit spending can continue without sparking a run on the dollar via foreign governments selling U.S. Treasury bonds. No one believes our creditors will ever sell the dollar. But they're wrong. Our creditors will not allow us to print money forever. We are squandering and destroying the greatest advantage of our country – control over the world's reserve currency...
Meanwhile, inflation will wipe out much of the value of long-dated U.S. government bonds, causing their prices to plummet. – January 2009 Porter Stansberry's Investment Advisory
In his January issue, Porter recommended going long corporate bonds – whose value would increase as the dollar fell and inflation returned – and shorting long-term U.S. Treasuries, which will disintegrate as the government continues printing dollars. The trade is currently up around 23%.
Describing his favorite type of investment, Jim Rogers famously said in the traders' bible, Market Wizards... "I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up." His point was clear... If you wait for a can't-lose trading opportunity, like Porter's Treasury short, you'll make a fortune.
So it's no surprise Rogers is jumping into the short Treasuries trade... "The government is printing lots of money and borrowing even more; that's not the basis for a sound currency," he told Bloomberg in a telephone interview. "The idea that anybody would lend money to the U.S. government for 30 years at three or four or five or six percent interest is mind-boggling to me."
Rogers said he's unloading dollars, and he plans to "short U.S. government bonds someday." Rogers has missed our 23% gain, but there's much more deterioration to come in U.S. Treasuries.
Date Range:7/2/2009 to 7/9/2009
Date Range:7/2/2009 to 7/9/2009