Meet Doug Casey "the most unusual investor in the world."
He's been calledthe "ultimate insider" in the mining and
natural resources business. See how he made a fortune when
gold went from $103 in the summer of 1976 to over $850 by
January of 1980. Find out his take on gold today and his
overview of the best places to invest on the planet. To see
the report: click here http://www.dailyreckoning.com/speculator9
* * * * * * * * * * * * * * * * * * * * * * * * * * * * *
*** Yesterday was a typical summer day... The bear spent the
day at the beach...letting stock market investors shuffle and
bob without interference.
*** The Dow ended the day up 11 points. The Nasdaq fell 42
points.
*** What is there to say about such a middlin day? Nothing
much happened in the gold market...or in bonds...or in
stocks.
*** A report from the Labor Dept. says that wages rose 5
cents/hr. in May. As tight as the labor market appears to be,
it's surprising employers got away with just a nickle. But
one month's worth of statistics don't mean anything.
*** When p/e ratios rise above 22, according to a study cited
by Richard Russell (http://www.dowtheoryletters.com), you can
expect returns of only 5% per annum for the next 10 years.
*** Russell also worries that this bear market could be like
the long, confusing period following the peak in '66. If that
is the case, the 5% sounds pretty good. Because if you adjust
for inflation, stock investors went nowhere for approximately
20 years following the '66 peak. And yet, during that period,
there were several major rallies that carried the Dow up to
and beyond the '66 high. (see: Irrational Exuberance
http://www.dailyreckoning.com/body_headline.cfm?id=225)
*** Another interesting little note: the average
price/dividend ratio going back a century has been 25.50. The
ratio hit a record high (meaning stocks were paying the
lowest dividends in history) of 88.29 on June 27, 2000.
*** This also from Richard Russell:
"In 1948 Don Bradley published a booklet which explained how
the stars and planets and heavenly events, when analyzed
correctly, exert a force on the human psyche and thus on the
stock market. Sounds daffy? Sounds ridiculous? Don't laugh.
The Bradley Model has made some amazingly accurate forecasts.
The brilliant Paul Marcrae Montgomery of Legg Mason and the
equally bright Arch Crawford of Crawford Perspectives (520
577 1158) follow the Bradley Model. They've followed it for
years with many outstanding successes.
At any rate and for your interest, the Bradley Model traces
an irregular uptrend in the stock market, starting from last
December and ending in a high for the year to take place this
month - on July 21. Then a decline, and then a secondary
(lower) peak on September 14. After Sept. 14, the Bradley
Model says "down and dirty" for the stock market for five
months to February of 2001."
*** Despite Bradley's work, I believe the fault lies not in
our stars, but in ourselves. Polls show that as the bear suns
himself at the beach, investors are becoming more bullish.
Advancing stocks beat out declining ones yesterday, as
they've done for 8 out of the last 10 days, 1594 to 1242. New
highs hit 99; new lows numbered only 21.
*** October platinum continues to rise - up $6.90 yesterday
in an otherwise unexciting metals market.
*** Meanwhile, on the River of No Returns, from Alan Newman
at Crosscurrents (http://www.cross-current.net):
"Clearly, time is running out for Bezos and company to turn a
buck or three profit. Will they ever? In the company's first
year, expenses were 40.9% more than revenues. Improvement was
clearly visible in 1997 when expenses exceeded revenue by
only 22.1% and again in 1998, when the vigorish was a mere
17.9% over total revenues. But last year, expense exceeded
revenue by 36.9%, a staggering amount when you consider that
the company was running revenues at more than 104 times the
pace of 1997. As a consequence, expenses were 101 times what
they were in that first fateful year.
Amazon may be the first company in the history of the planet
with $72 in debt for each of its customers. The trick in
maintaining 17 million customers, of course, is to offer
everything at a loss, a deal consumers cannot refuse. To
compete with traditional and other Internet booksellers,
Amazon offered to FedEx the new Harry Potter book upon
publication at no extra cost above the regular shipping
rates. Pre-orders went to a 40% discount from retail, and we
can only suppose that the 256,310 consumers who pre-ordered
cost Amazon a buck or two on every copy Fed Ex'd at lower
rates than otherwise available. That's how the company
is able to secure 17 million customers and keep them - by
giving away the store. The pattern we sense is one of
inevitable doom for Amazon's shareholders and we must admit
not one scintilla of surprise at the recent drop in share
price from which no dead-cat bounce will mollify those who
bought at much higher prices. We are beginning to see
Amazon's survival in jeopardy."
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* * * * * * * * * * * * * * * * * * * * * * * * * * * * *
After the 'I do's were said, the wedding party made its way
to the church hall for the reception.
A long table had been prepared at which we served ourselves,
buffet style. There were little biscuits with ham, large
bowls of shrimp, several different plates of vegetables, and
assorted condiments and crudites - prepared by the ladies of
the church. Half the table, though, seemed to be set aside
for desserts.
I don't know what doctrinal point is the cause, but for some
reason Baptists prepare the best desserts. Episcopalians
usually have good decorations, but they are no match for the
Southern Baptists in the food department. Like the religion
itself, Episcopal weddings look good but can leave you
unsatisfied.
The best church food I have ever had was at an A.M.E. church
in rural Maryland. A.M.E., for those unfamiliar with it,
means African Methodist Episcopal. This was many years ago,
but on that occasion a woman as big as a houseboat, named
Hattie, stood beside me as I ate fried chicken and said in a
deep, throaty voice that sounded like an Ella Fitzgerald
song: "I likes to see a man eat!" {It is considered
politically incorrect to report the black dialect as it
is...or was... actually spoken - but that is what Hattie
said.)
But French Catholics can put on a good wedding feast too. And
it will have one major advantage over a Baptist one: liquor.
This aversion to alcohol created a small problem for my
brother in law, Rev. Campbell, at the Sunday service. The
wedding still fresh in his mind, he recalled the story of the
wedding feast at Cana in Gallilee. Jesus arrived at about the
time the hosts ran short of wine. The Nazarene asked that
jugs be filled with water. This done, he performed his first
miracle - he changed them into wine.
"Jesus can perform miracles in your life too," said the
Baptist preacher, ignoring the contradiction and continuing
in his very southern accent, "He can change ordinary things -
like water - into sparkling things."
I wished someone had performed Jesus's first miracle on
Saturday night. But instead of wine, or champagne, Jesus
seems to have entered these people's lives and turned the
wine into fruit punch.
Sunday morning I awoke with a bit of a headache. It must have
been a result of too much temperance... after spending a
couple of days in the buckle of the Bible Belt.
"All you have to do is to remember your ABCs from Bible
School. Do y'all remember your ABCs," Rev. Campbell asked the
Sunday crowd. I had little doubt that every one of them
remembered. But he spelled it out for us anyway.
"First you have to Admit that you're a sinner. Then, you have
to Believe that Jesus Christ is the son of God. And you have
to Commit yourself to follow Jesus all your life."
"It's as easy as ABC. And if we all remember our ABCs, God
can perform great miracles in our lives."
Ghandi once said he was more free in his prison cell than
most of the people walking the streets. In this reflection,
Ghandi was vain. He could see the shackles others wore, but
not his own.
Southern Baptists do not bind themselves only with the
fetters of holy matrimony. They ask adherents to commit
themselves to a code of conduct and a whole set of beliefs.
Baptists (and I am only speaking of Baptists as an example;
this is, of course, true of many different groups) give up
the freedom to choose. Even a Chateau Rothschild 1986
Bordeaux is off limits.
Despite the lack of alcohol, Baptists are growing in number.
The churches are packed with vigorous, robust congregations.
But you will search in vain to find Southern Baptists in the
New York Review of Books. American intelligentsia are
contemptuous of Southern Baptists. For nearly the entire 20th
century, intellectuals have scorned the ABCs of religious
faith. Filmakers have mocked them. Writers have sought to
reveal dirty linen in every Bible thumping household. Even
the mainstream churches have turned their backs on them.
Episcopal ministers have more faith in taxes than in
miracles. They urge their parishioners to support government
programs to care for the sick and feed the poor. The
chattering classes sneer at the shackles of religion, but
cannot see the prison of contemporary ideology that confines
them.
None of us are free. We are all prisoners of our own ideas,
customs and beliefs - as well as the natural laws of the
physical universe. Marriage, religion, Democracy, anti-
nomianism, the boiling point of water, the Designated Hitter
rule - these are just a few of the millions of ties that
bind. Some think the world is ruled by a God, whose bidding
must be done. Others put their faith in secular authorities.
Still others think themselves the crown of creation and
believe they can figure things out for themselves.
But none are free.
All people bow down before some public God, whether the God
of Jehovah, the God of the State, custom, habits, or their
own private demons...and all of us wrinkle a bit as we grow
older.
At one comic low in the history of democratic government a
state legislature decided that the value of Pi - which
expresses the relationship of the circumference of a circle
to its diameter - should be rounded off to 3 to make it
easier to work with. Despite an official Act of the
legislature, however, the actual value of Pi remained
unchanged. We are stuck with it...just as my soul is stuck,
as Yeats put it, fastened to this "dying animal."
But there is another meaning to the word "free." Ghandi was
wrong. He was not free in his cell. He was free when he got
out of it. He walked out still shackled to all his bad ideas
- but he was free from the prison.
For my part, a private confession that I make reluctantly...I
am willing to stand before God when the time comes - if that
is what happens. But, to paraphrase Faulkner when he got
fired from his job at the Post Office, I'll be damned if I
want to answer to every son-of-a-bitch with a gun or ballot
in his hand.
Your correspondent, back in Baltimore...
Bill Bonner
My daughter Maria blurted out to her aunt that she "had Daddy
wrapped around her little finger." This was true, of course,
but I was shocked to realize that Maria was aware of it. I am
a prisoner...and a happy one.
P.P.S This poem, sent by DR reader R.B. seems appropriate:
"Why Should Not Old Men Be Mad?"
W. B. Yeats 1939
Why should not old men be mad?
Some have known a likely lad
That had a sound fly-fisher's wrist
Turn to a drunken journalist;
A girl that knew Dante once
Lived to bear children to a dunce;
A Helen of social welfare dream,
Climb on a wagonette to scream.
Some think it a matter of course that chance
Should starve good men and bad advance,
That if their neighbors figured plain,
As though upon a lighted screen,
No single story would they find
Of an unbroken happy mind,
A finish worthy of the start.
Young men know nothing of this sort,
Observant old men know it well;
And when they know what old books tell,
And that no better can be had,
Know why an old man should be mad.
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