YOU COULD'VE MADE 91% IN ONE DAY! or as one fellow investor
- "Lynn, I wanted to thank you for [your] efforts...in
the last couple of weeks the information [you
supplied] has produced a realized total of $23,210."
With Lynn Carpenter's F-O-X system, you'll be alerted to
early price volatility in stocks like American Express.
Lynn's readers bought bargain call options when the stock
was at $54.38...and sold them the next day for 91% gains.
Follow this link - and get in on her next trade:
*** Last March, Cisco was selling for $81. It fell to an
intra-day low below $32 on January 3rd. Then, the Greenspan
Put came into play and the market rebounded. Here we are,
already into February, and the stock is back up to
$33.50... still, it's down almost 60% from its high.
*** Cisco fell 3% yesterday. Yahoo rose 6%.
*** The financial news is a knot of contradictions and
paradoxes. The Dow rose 101 points. But the Nasdaq fell 17.
*** Consumer confidence is at a 4-year low...but the
Cleveland Plain Dealer reports that mortgage activity rose
between 100% and 150% from December to January.
*** "The applications have been rolling in like crazy,"
said a spokesman for Third Federal Savings in Cleveland.
Half of the applications are for refinancings and a third
of those are "cashing out" - drawing down equity in their
*** The "R" word is all over the world's financial press.
Gene Epstein of Barrons' did a computer count of the word
in the Wall Street Journal database. Turns out, more people
are talking about recession now than before any recession
in recent times.
*** Does that mean we won't have a recession? Has it
already been fully discounted by the markets? Is it already
over? Hmmm... Isn't Mr. Market always full of surprises?
*** A humble guess: When the news media speak of
'recession' they refer to a mild down turn which is
expected in the first two quarters of this year. Almost
every economist, analyst and investor expects this 'trough'
to be short, shallow and relatively sweet. Some think the
worst is already behind us. And almost all look across it
to the good times on the other side. The big surprise is
likely to be a deeper, longer, and less pleasant downturn
than they can now imagine.
*** "Where's the R?" asks John Crudele in the New York
Post. Crudele notes that the U.S. economy created 268,000
new jobs in January...a rate higher than that of the
Clinton years. How can you add jobs at that pace in a
recession? But the unemployment numbers are rising too.
*** In a narrow sense, the labor numbers are hard to figure
and may not mean much...considering all the adjustments to
which they may be subjected. In a larger sense, there are
so many financial 'facts' available to us that the net
effect is that we know absolutely nothing - more below.
*** And how about this: Internet companies sacked 43,000
workers last year. "Dotcommers bear the brunt" weeps a
headline from the Financial Times. Yet, another paper, the
S.F. Gate, tells us that "Cash Cascades into Internet
Firms' Coffers." Venture Capital investors dropped $7.9
billion on the dotcommers in the last quarter. In the year
as a whole, $47.8 billion was invested in Internets -
nearly half the entire VC total.
*** Bad money after good was also the theme of a note from
Dan Ferris: "I overheard a young man telling his wife," he
writes, "that it's OK that their portfolio lost 40% last
year because this is a great time to buy. Sure, they lost a
lot of money, but they got through it. They're OK, and they
have plenty of money left to buy more shares."
*** Two headlines from the Financial Times capture the
mixed up sentiments of the day: "Fed to the Rescue," says
one. "Has the Fed stifled U.S. growth?" asks another.
*** GE rose 3% yesterday...gold fell $2.
*** You may remember the collectivist delusion of Japanese
investors at the peak of the mania: "If we all cross
against the red light together," one commented, "we will
all be okay."
*** Maybe Dallas Fed President Robert McTeer had a similar
thought in mind last week, when he made this suggestion to
the world's most indebted consumers: "If we all join hands
together and buy a new SUV, everything will be OK." He
ended his speech by urging his audience to "Go out and buy
something" in order to keep the boom alive.
*** Economists Paul Kasriel and Asha Bangalore report that
"Household non-mortgage interest payments as a percentage
of disposable personal income are at the highest level
since this series began in January 1959." But don't worry
about that: mortgage, mortgage, mortgage...spend, spend,
*** Americans are already living so far beyond their means
that they rarely even see each other. 'Their means' tend to
live in a more modest house in a rougher neighborhood. The
private sector financial deficit now equals 6% of GDP...or
about $2 billion per day. And the current account deficit,
illustrated by a negative balance of trade of more than $1
billion per day, has risen to more than 4% of GDP. Somehow,
sometime...these out-of-whack figures will be corrected. If
there is symmetry in the world, dear reader, these tides
will ebb as well as flow.
*** "Tourism is now the number-one industry in Nicaragua,"
says Kathie Peddicord, "replacing fishing. Of course, the
fishing is still good...but the cruise ships are depositing
as many as 3,000 people per week at the dock in San Juan."
"In Managua, for example," Kathie continues "signs of the
current economic growth are everywhere. The brand-new
InterContinental hotel is first-class. Also new on the
horizon in the past two years are a Princess Hotel and a
Holiday Inn. There's a Subway (sandwich shop)...a TGI
Friday's...a Radio Shack...and plans for a Hard Rock Cafe."
*** "Investing in Nicaragua is truly pioneering," writes
Steve Sjuggerud, who recently opened what he calls a "high-
end" resort for surfers at our place on Rancho Santana.
"There are unforeseen risks, and questions that can't be
answered. But that's what allows you to be able to buy a
few hundred acres on the beach - for less than a million
dollars, which you can still do here." (see: A Little Piece
Black-Listed Cancer Treatment Could Save Your Life!
The key to stopping many cancers has been around for over
30 years. Yet it has been banned by the very agency
designed to protect your health-the FDA.
A German research scientist discovered a natural formula
that could prevent and even cure cancer. Her findings,
which were barred from the medical journals, are now
finally available in an updated English translation.
"What we call progress is the exchange of one nuisance for
"Information," said my friend Jim Davidson, "should be seen
as the recipe for progress. That is why the Information Age
is truly revolutionary. Reducing the price of information
to zero makes more and better recipes available. The effect
will be to allow a major increase in economic growth
rates...much like the increase that took place in the
"Look, there's no law that says GDP growth and productivity
have to grow at 3% per year. For most of mankind's history,
they didn't grow at all - or grew at rates that were
negligible. But the industrial revolution made possible a
big improvement in economic growth rates. It really was
"And now the information revolution does the same thing.
For the first time in human history, the recipes are
accessible to almost everyone...and can be improved by the
world's brightest people, no matter where they are.
Productivity and economic growth rates are going to ratchet
up...this time, too, it really is different."
I spoke with Jim when I was back in Baltimore. We had
dinner with a few friends in our corporate dining room - an
elegant relic of a more prosperous city, once owned by an
American ambassador and used to host presidents Taft and
Wilson when they visited.
There were none of the fair sex present, so we were able to
talk freely about the subjects that most interest American
men in various stages of mid-life decomposition. We began
by noting how hollow and pointless it was to try to make a
lot of money... and spent the balance of the evening trying
to figure out how to make more of it.
Jim, as you can see for yourself from the paraphrased and
condensed comments above, is a believer in the enriching
power of information. I pass along his comments, as you may
have guessed, merely to take issue with them.
"The more information people have, the dumber they get,"
quipped my friend Michel about a year ago. At that time, we
were even more ignorant than we are today of what the
Information Age might mean. Michel's comment might have
been taken as either an observation, or a prediction.
Metaphorically, the quantity of available information -
recipes or not - grows up like a dense underbrush, through
which in has become difficult to see much of anything,
including the forest.
And theoretically, the Information revolution makes
possible a further division of labor, which stretches out
the division of knowledge. A person is able to earn a
living, drawing on a remarkably narrow, if deep, body of
knowledge. Thus, a computer programmer may know nothing
about fluid mechanics, botany, horse-shoeing, haberdashery,
electrolysis, Italian opera, the credit cycle, or chopping
wood. Yet, he eats well, drives the latest product of the
automobile industry and wears clothes designed by gay
As the division of labor expands, more and more people know
less and less about more and more. Or, put differently,
they know more and more about less and less - as each
narrowly-based activity requires more and more knowledge to
Have you noticed that people seem dumber today than they
did a few years ago? If you were searching for an
explanation, perhaps this will do: "They have reached a
limit of what they can store in their brains," opines Dr.
David Cantor, director of the Psychological Services
Institute in Atlanta. "These people forget things because
they were too distracted to absorb them in the first
People have neither the time nor the ability to hack
through the ragged jungle of facts in which they are
trapped, in other words. Instead, they burrow down, in some
little niche of the New Economy, ignorant of the world
around them...and hope to strike gold.
A year ago, this was just tall guessing. Now there is
"Young people today are becoming stupid," says Dr.
Toshiyuki Sawaguchi, professor of neurobiology at
Hokkaido's school of medicine. "They're losing the ability
to remember new things, to pull out old data or to
distinguish between important and unimportant information.
It's a type of brain dysfunction."
"Growing numbers of people in their twenties and thirties,"
reports an article in the Sunday TIMES of London, "are
suffering from severe memory loss because of increasing
reliance on computer technology...computer technology,
electronic organizers and automatic car navigation systems.
They claim these gadgets lead to diminished use of the
brain to work out problems and inflation 'information
overload' that makes it difficult to distinguish between
important and unimportant facts."
The evidence is both clinical and anecdotal. "One high-
flying 28-year-old salesman..."reports the Sunday TIMES,
"was forced to give up his job when he found himself
forgetting where he was going, who he was supposed to be
seeing, or when he finally got there, what he was selling."
"Errors may occur in the brain's software that have nothing
to do with age, but are related to someone's lifestyle,"
said Dr. Takashi Tsukiyama, who runs a private clinic in
Tokyo, "such as not using your brain enough."
Your correspondent...trapped by the facts like everyone
else...trying to hack his way out...Oh for some napalm!
The Daily Reckoning:
author Bill Bonner
Bill Bonner is,
in spite of himself, a natural born contrarian. Early each morning, Bill
writes The Daily
Reckoninghis take on the financial markets and whats going
on in the worldand sends it off by e-mail before most Americans
alarm clocks have buzzed. Many readers say it's the first thing they want
to read when they get upnot only because it's informative and thought
provoking, but also it's inspiring, in its own quirky and provocative way.
Of course, there's
much more to Bill than his daily market commentary. He's also the founder
and president of Agora Publishing, one of the world's most successful
consumer newsletter publishing companies. Bill's passion for international
travel and big ideas are reflected in the company he's successfully built.
In 1979, he began publishing International Living and Hulbert's
Financial Digest . Since then, the company has grown to include
dozens of newsletters focusing on health, travel, and finance. Bill has
vigorously expanded from Agora's home base in Baltimore, Maryland since
the early 90sopening offices in Florida, London, Paris, Ireland, and
subsidiaries include Pickering
& Chatto, a prestigious academic press in London and Les
Belles Lettres in Paris, best known as a publisher of classical
literature in bilingual editions.
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Last modified: April 01, 2001
Published By Tulips and Bears