Stockmarket celebrates GM bankruptcy with big rally, while Obama celebrates in classic despot style!
Mark Hulbert writes:
Contrarians normally would be having a field day analyzing the stock market’s behavior on Monday.
That’s because, in the face of the bankruptcy filing of General Motors Corp. , the stock market soared — providing a classic illustration of the “What, Me Worry” school of investing that is so often seen when markets are vulnerable to a decline.
But a development after the close on Monday makes it much harder for contrarians to make their bearish case: The investment newsletter with the best stock market timing record over the last three decades switched from being only moderately bullish to aggressively bullish.
I’m referring to Dan Sullivan, editor of The Chartist. It is in first place for stock market timing advice among all services the Hulbert Financial Digest (HFD) has been tracking since mid 1980 — which is when the HFD began monitoring the investment newsletter industry.
In a communication to subscribers Monday evening, Sullivan recommended that subscribers mover from being only partially invested in equities to being fully invested. And in his most aggressive model portfolio, he actually moved to being 125% invested — in other words, to be 25% on margin.
Sullivan provided no rationale for his becoming more bullish. But in the most recent issue of his newsletter, dated May 21, he was already entertaining the possibility that the rally that began on March 9 had much further to run:
“During the early stages of bull markets, many investors will remain on the sidelines. They have a preconceived idea of where the market will go and will cite any number of economic concerns, as well as the warnings of CNBC pundits, to support their bearish case. Don’t get us wrong; they might be right, but if history is any guide, the great majority of investors who were badly mauled during the bear market will not commit even a portion of their capital until it is much too late.”
In the 1960’s a Kenyan named Barrack Hussein Obama had a dream to one day be a powerful dictator, living in grand style while fleecing his country, and carrying out various socialist/marxist economic experiments. Alas, his dreams came to an end after one too many drunk driving incidents. But his dream lives on in his son, Barrack Hussein Jr. who is now President of the United States, and slowly bringing socialism to the United States. To celebrate his nationalization of General Motors, and vast swaths of American enterprise, he spent $100,000 of taxpayer dollars to fly his wife on a private jet (with separate jets for his entourage, of course) to New York City for dinner and a Broadway show. Why separate planes? Mile high club, anyone? Of course, the Messiah is entitled. What’s next? Perhaps the Messiah will “borrow” or nationalize some prime beachfront homes in the Hampton’s or Martha’s Vineyard for his family? Why not? That’s the way it’s done in Zimbabwe.
Meanwhile, it’s a great time to make money in stocks. Buy! Buy! Buy!