The market is oh so predictable… I kid you not.
On April 6, 2009 I wrote the following email to Squawkbox Europe.
Me I think this will last till around June before we start pulling back slowly with no major selloff. Just dribs and drabs as the market and economy begins to recover…
So what gives, why is it that at the beginning of April I had a hunch? Why did I think we would go up till June? Answer is because the market is so predictable. I went back to the 1900’s ever since my original time frame was blown out of the water. And looking at all of that data what it showed me was that indeed we would have a run-up with sells offs until the fall. Though I am not making any predictions since I have not yet had time to digest the latest market data. Though I do think in the medium term we are headed up.
I guessed June because of earnings since right now all you see are green shoots, but no earnings and as such everybody thinks that selling right now is the thing to do. But there are green shoots and here it is:
But in recent weeks, Mr. Halbauer and many others in the province have noticed that the economy is slowly improving, especially in the northern half of Alberta.
“We are almost really busy. Work is rolling in,” Mr. Halbauer said.
Indeed, a run-up in oil prices and recent news that two oil sands projects, including Imperial Oil Ltd.’s $8-billion Kearl mine outside Fort McMurray, are going ahead has buoyed many.
As I have been saying time and time again the fact that commodity prices are going up is good for the world economy. Sure it sucks for the American consumer, but let’s face facts the American consumer is already under water and there is no chance that they will save the world economy. As I have been saying, it will be the combination of higher commodity prices, and world exports that will cause the world economy to jump start again.
I was recently talking a fellow Canadian and we both came to the conclusion that to a large degree Canada is being protected from the massive downturn. Sure Ontario is hurting, but the rest of Canada is doing ok.
What people need to remember is exactly an Albertan economist is saying:
But still, he’s optimistic that the province’s economy is headed towards “balanced growth,” instead of the recent boom that led to high construction and labour costs and housing prices.
“When we look at the decline here, it’s not as through we were declining from a normal growth path.”
This is the point, we are getting back to normal growth, and a normal economy.
So how do you play this market? Just as I have been doing for quite a while. Buy international corporate plays! Stay away from local market players because you will get burned. What this new century is showing is that we are about to start a truly global boom, a place where people are just people and we all begin to understand each other.
YES I am bullish! I am actually sad that I was not born a couple of years ago because I would truly love to see how this century ends. It will be exciting actually…
BTW I am not convinced that the American consumer is done for. I am just saying it will not be the American consumer that will lead this global economy out of the recession. Though it will be the American consumer that will give the additional kick of the global economy into higher gear.