Monthly Archives: August 2006

If September turns out to be as “bad” as August, the market is in a lot better shape than I thought. August and September are usually the two worst months of the year, but we closed today with the S&P 500 for August up 2.13%. Maybe I’m still suspicious because I was burned so badly in 2000, when a very nice 6.1% August rally capped a four and a half month recovery from the dramatic March-April decline as the Internet bubble burst. I thought that rally meant the market had stabilized and was starting to look forward to the usual...

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Meet Ernesto. He’s just a young ‘un, but he is expected to be quite something when he matures. Right now, he is a tropical depression near the Caribbean’s Windward Islands, but according to a forecaster at the Miami-based U.S. National Hurricane Center: “As it moves over the warm waters of the Caribbean, it could get even stronger. Conditions are favorable; it’s just a question of when.” Ernesto would be the fifth named storm of the current hurricane season, with no hurricanes yet. On average there have been 4.6 tropical storms by this point in the season, but by this time...

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Is inflation whipped? Is the Fed done raising interest rates? Do we have new peace in the Middle East? Is it going to be a light hurricane season, after all? Has the market bottomed two months earlier than I expected? I doubt the answer is “yes” to any of these questions, but I want to answer a number of your emails about what we should do if all of these turn out to be true. The background to this is a representative email from Ken, who said he is down on all of the stocks he bought that are still...

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My sympathies to our East Coast subscribers, who are now “enjoying” the heat that ripped through California a week or two ago. And I thought it was hot at the Money Show in Washington, D.C. last week! Of course, the heat is helping to skyrocket natural gas prices and contribute to another big drama right now — the Fed’s response to an economy that is clearly slowing, but inflation that is clearly accelerating. Janet Yellen, the president of the San Francisco Federal Reserve Bank, gave a speech this week in which she said (please note my translation in parentheses): Economic...

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