Annual Letter to Subscribers
Research for Online Investors

by John Dalt

1/4/10

We have survived a tumultuous year.  We saw a sell-off that shook confidence in all investors.  The economy seems to be recovering as we get news almost weekly of slowing initial unemployment claims, increased capital goods orders, and a bottoming of the real estate market.

Precious metals have swooned in the last four weeks.  TV talking heads speak of a ‘gold bubble’, don’t believe it.  The market may sell off to consolidate, but precious metals must go higher just like interest rates.  There is too much money being printed all over the world.  No matter what the central bankers say, the money cannot be withdrawn because it will cause political upheaval.  Unemployment is too high and the one tool politicians have to encourage employment is loose money.  We all know where that leads.

Much has been written concerning inflation, stagflation, and hyper-inflation.  Stagflation is when inflation occurs, but unemployment stays high, and interest rates spiral higher as bond ‘vigilantes’ require higher interest rates to buy debt.  This is where I believe we are headed.  Most all of us remember the 1970’s, stagflation will be here again.

We believe the market will continue higher, short term.  Our target is 1150 to 1200 on the S&P 500  We believe 2010 will be a tough year with the market ending in the 1200 to 1400 range on the S&P 500  This would put us back in the range of 2008  How we get there could be very interesting.

We have experienced a nice run-up in the last six months without any harsh sell-offs.  Investors are sitting on nice gains, and will not want to give them back easily.  We look for at least one hard sell-off this year.  My druthers would be that it occur in the first quarter, and get it over with.  Sadly, I have no input!  We will not be surprised to see 880 on the S&P in 2010  We will be prepared and be buyers, when this occurs.

We have asked for input from our premium subscribers on improving the web site, and the information we provide.  Everyone was very kind with compliments.  One suggested change we have made is on the Long-Term Portfolio results page.  Over the weekend we built a “Model Portfolio Performance by Quarter” grid.  This helps us look at the returns on the Long-Term Portfolio following our investing rules.  Many thanks to subscriber D.E. for encouraging us, and suggesting ideas.  The emails were flying!

This will be updated every quarter, so subscribers and potential subscribers can see how we are doing, in real dollars.  You can view it anytime through the Past Results àLong Term PortfolioàModel Portfolio Performance by Quarter, today you can just click here.

This has been a great year for the Long-Term Subscribers as we beat the market by any metric.  Pure percentage basis we beat by 1.3%, and the model portfolio beat the market by11.5%

The Buy, Sell, Hold Service was just started in October.  We had a couple of our picks take a dive on us, but we ended with a positive return for the year.  We are working our way out of the problems and should start kicking off some nice profits.

The SwingTrader had a good year, but the work was much easier in the first eight months of the year, when we had wild price swings.  The last few months have kept us holding our breath for smaller gains, taken over longer time frames.  The market doesn’t have to perform as we always expect!  Smaller gains are still gains, and limited losses keep us out of trouble.  SwingTraders hope for the big hits, but nice steady smaller gains work almost as well.

The market came out of the chute this morning and never looked back.  Wouldn’t it be exciting, and fun, to look at your computer everyday and see green?  We all know that can’t happen, but it sure puts a bounce in your step when it happens.  It is important to remember these days when it looks like the screen is bleeding the lifeblood out of my account!

We will work to bring you information through the next year that will make you a better investor or trader.  We will present ideas throughout the year to help you make money.  These are our commitments to you.

We not only closed out a year, but a decade as well.  Today's chart presents the price performance of the Dow for each decade since 1900. So how do the 10 years just passed rank? As today's chart illustrates, the performance of the Dow from the close of 1999 through 2009 was the second worst performance on record. Only the Great Depression decade of the 1930s was worse.

The past decade also shares an unfortunate outcome with the 1930s in being a decade during which the Dow actually ended lower than where it started.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

MarketToday Home Page

Back to Top