6/6/02
Hi,

The DJIA and NASDAQ are now in the last, desperate attempt to rise - we'll see a spurt to 10,400 or so at most for the Dow and NASDAQ to 1800, then Dow heading down towards 6000 and NASDAQ towards 1000.

For the past three weeks I have been travelling and what I've seen in terms of business is not pretty. Several people are unable to get jobs - any jobs - in this market (as a matter of fact, those collecting unemployment is at a 19 year high). From conversations with strangers, businesses are down year to year, month to month, etc. Worse yet, debt levels continue to rise.

Yet the real estate markets in many major areas, Fairfield (CT), New York City, Washington DC, Hampton Roads (VA), Palm Beach County (FL) to name a few, are completely and totally insane.

How insane? In some markets, prices are up 20 - 25% in 2002 alone. More bad news: I don't see how these prices are sustainable!

We are entering a very difficult economic period in the United States, which will last for 5 - 10 years. Those of us who are largely debt free and remain liquid will flourish. Great opportunities will become available - to purchase businesses, or in the stock market - for those who have patience.

Those of you who purchase gold stocks should be sitting with 50% to 100% gains. Take profits in the short-run and look to reenter positions at lower bids. Other than precious metals (gold) stock and gold mutual funds, use any rally to liquidate your stock positions. Finally, I DO NOT recommend you short the DJIA or any other index due to timing issues.

Arnold

- posted by Arnold @ Thursday, June 06, 2002