A Contrarian Indicator

[Andy62]

In making investment decisions I like to check all sides of an issue and listen to everybody's reasoning and opinions. Last night I ran into some people that I haven't seen for a long time. They represent a broad cross section of the population and the economy from a golf pro to a personnel manager. I was the oldest one there with the others all being in the 40 to 60 year old range. Politically they have been conservative Democrats. To a person they were very pessimistic on the economic future in the US. The information that I found the most interesting was the depth and characteristics of the employee cuts that the companies are making. I live near the Nike Campus which is their World Headquartes and a major employer in the area. The same management has been in control there since it's founding and over the years they have interpreted the economy well and made decsions that have turned out to be right. My experience has been that you can't beat "track records" [ no pun intended since we are talking about Nike] in interpreting anything. People who have made smart decisons in the past are the ones most likey to make smart decisions in the future. Nike has really been cutting deep in letting employees go. To me the most telling characteristic of their terminations is they are terminating people who have worked there for over 30 years. I intepret that to mean that they are not expecting a recovery of any magnitude. To my way of thinking the actions of companies are much more accurate reflections of what is coming as they have skin in the game and on line experience which academics, politicians and economists lack

[MikeNY]

Gordon let's all hope Nike is wrong this one time, so many people can lose thier jobs and so many be hurt. I understand why they think that, that is what is logical.

[Andy62]

Mike, I agree because in the end it all comes down to jobs.

[April]

I don't remember the source, but in the past few days I read about a number of other large companies letting go of significant numbers of employees.

When someone you trust makes decisions like that, that is not a good sign.

[Andy62]

The US Treasury auctions last week went very well with relatively low interest rates and good foreign investor participation. The opitimists interpreted this as confidence in current government policies,but others interpreted it as a return to safe harbor investing and a lack of confidence in the strength and speed of any worldwide economic recovery. Time will tell,but I remain skeptical of this recovery. I am fairly aggressively invested,but I am keeping an itchy trigger finger on the sell button.

[gruntbrain]

I'm nearly fully invested but not agressively invested. I'm overweight( to the point of obesity) guaranteed income stuff( the protect that pincipal principle)

[Andy62]

If the dollar starts dropping it is hard to see very many income producing investments holding their value.

[gruntbrain]

Certainly a falling dollar hurts cash, bonds, & other fixed income but the extent & timing of any fall is unknown. In any case, a diversified portfolio is one way to address an unpredictable falling dollar.

Inflation? Deflation? ... lotsa unknowns in spite of the rantings of the know it alls

[Andy62]

They are all unknowns. The world has never been in a similar situation. We all need to practice our broken field running.

[gruntbrain]

I missed the call from Darwin to evolve into a nimble broken field financial runner

[Andy62]

It's never too late!




"Within everyone one of us is an 'evolutionary success principle' placed there by the creator to help us survive and succeed in an ever changing universe."
Alois P. Swoboda

[gruntbrain]

Today's Market action reminds me why I own some bond ETFs; I'll likely hold 'em 'til breath due us part.

[Andy62]

This is a good time to ride out the profits of the last 5 months with the summer dip and see what happens in the fall. Everything so far all over the world has been stimulus-the big question is if and when a sustainable recovery will occur. It should be exciting whatever happens.