Ned W Schmidt CFA's Contributions

With the U.S. mired in the longest running period of high unemployment since the last great failure of Keynesian economics, the Great Depression, this jobs report should have been welcome news. Instead, Gold, and most other markets, seemed to plunge into a black hole.

Technology businesses have always seemed to this researcher to be a losers’ game. Soybeans, in the past decade or so, have been converted to a winning game. Why play with losers when one can play with winners?

Owning Gold as wealth insurance is so widely accepted now as to make it a mainstream investment. A portfolio without Gold is like owning a home without insurance in a region where hurricanes are a normal weather event.

One of the secrets to successful fishing is to fish in a lake with fish in it. Fishing in a lake void of fish is not likely to be a worthwhile venture, though it still beats a day of work. That simple reality is something much of the investment community has never really understood.

Wow! The hyperventilating hyperbole on hyperinflation to be brought about by QE-3 was near overwhelming. From some of what we read, QE-3 is to cure all the economic woes of the U.S., cause hyperinflation, crash the U.S. dollar, prevent male patten baldness, push $Gold to $2,400, and cause the death of our favorite pet.

Most investors never heard of WASDE until recent years. With origins in the need for an understanding of U.S. grain supply during World War I, the first reports were created that came to be WASDE. The USDA’s report, World Agricultural Supply and Demand Estimates, has become one of the key reports for investors and governments around the world.

A question that follows from the above is also of interest. Why is Bernanke transferring so much income and wealth from savers and investors to mega-banks and other speculative funds? We are of the basic crowd that believes that actions are more important than words.

With harvesters now beginning to move in parts of the U.S. the reality of the drought is now being recorded. Farmers face the loss of substantial income, and in many cases actual losses.

Animals, real or imaginary, must be fed on a regular basis. That feed, as we have also learned in recent years, can be either real feed or imaginary feed. Virtual animals that live on web-based children’s games can survive on virtual feed.

We have always wondered if the Street had two businesses, trading securities and raising poultry. The Street has had a long successful history of serving up “turkeys” to investors. In the past year it has been very good at doing so. Last we visited Facebook was our topic.

Many lessons have been revealed by the experience of the EU nations this past year. In parts of the EU, those lessons are being given serious reflection. However, two nations, the U.S. and France, seem determined to ignore the adverse financial consequences of bad government policies.

Facebook was to be the rebirth of the glorious technology stocks. Portfolio managers have been longing to return to the era when they did not think. They just owned massive positions in technology and internet stocks.

With the wonders of modern communications brought to us by the internet and all the marvelous electronic toys now available, you too can publish your fantasy forecasts for the economies and markets of the world.

So, you consider yourself an informed investor. You watch CNBC, a.k.a. the cartoon channel light, each day. You have more investment web sites book marked than anyone on your block.

In the following week we got a glimpse of what Keynesians view as a “role model”, and one of their goals for the future. Below is a headline that appeared that next week.

A month ago we warned that AAPL($602) had broken down from a parabolic rise. Despite near universal love for this stock, the failure of that pattern was a warning that a much lower price was the destiny for this purveyor of electronic toys.