A Tip Of My Hat To Mr.Obama
Jerry Welch - InsideFutures.com - Tue Dec 03, 8:02AM CST


Jerry Welch, Commodity Insite!
Call me at 406 -682 -5010
Ennis, Montana 59729

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Below is my weekly newspaper column from November 22 entitled, A Tip Of My Hat To Mr. Obama. I hope you find something of interest in my ramblings.

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A Tip Of My Hat To Mr. Obama


This week, for the first time in history the Dow Jones closed over the 28,000 level and remains firmly in a bull trend. It is now the best and most bullish equity market in history. According to CNBC news, The current market boom, which started March 9, 2009, has enjoyed a whopping 468% gain for the S&P 500 through the first day of November, according to The Leuthold Group. And, this record-long bull run also marks the best-performing one since World War II, the firm says.

When it comes to a market, any kind including equities, two of the most difficult forecasts to predict is when will a long term bottom be seen. Or, a long term high. Once a low is in place and values head north, being long can be quite rewarding. Once a high is in place and values head south, short positions can be quite rewarding. Or, exiting existing long positions can save an investor (or agriculture producers!) a great deal of money.

Forecasting is more complicated by the fact that markets tend to bottom when things appear the bleakest. Markets also tend to top out when things appears the most bullish. For the Dow Jones and other equity markets, things appear quite bullish today. For commodities per se, the very opposite is being seen.

In my view, the best forecast I can recall regarding the stock market was by President Obama. Keep in mind that according to many, the bull market for the Dow began on March, 9, 2009. And from my book, Haunted By Markets in a chapter entitled, The President Recommends Buying Stocks that I penned on November 27, 2009 comes the following.

On March 4, President Obama boldly stated it was a ripe time to buy into the stock market. What youre now seeing is profit and earnings ratios starting to get to the point where buying stocks is a potentially good deal if youve got a long-term perspective on it, he said. Many observers interpreted the remarks as a veiled attempt to spark a market rally. But the market failed to rally and instead, the Dow closed that day in the red by 37 points to settle at 6726. A year and a half earlier, the market was over the 14,000 level!

Recently, the Dow traded as high as 10,400, far above the levels of March 4, when President Obama suggested that buying stocks was a, potentially good deal. The Prez did a good job of forecasting!

There are times when it is best to watch what a U.S. President does and not listen to what he says. Then there are times when it is best to listen to what a U.S. President says and not to what he does. Taking to heart what President Obama said on March 4 and acting on his words as well, would have been very profitable.

Stocks and commodities have been wildly bullish since March 4, when President Obama strayed from the business of politics and moved into the business of markets. Is forecasting or offering investment advice part of the job description, the business of The President of the United States?

I am reminded of a story of a man that learned a lesson about minding his own business the hard way. One afternoon while walking past a mental hospital the man could hear the patients shouting 13...13...13! Curious, he approached the hospital but saw the fence was too high to peek over. Then he noticed a tiny gap in the wooden planks wide enough to look through. Walking quickly to the fence, he pressed his eye against the open hole in the plank to see what all the commotion was about.

Suddenly, a patient poked him in the eye with a stick. Reeling backwards and giving out a high pitched yell, he turned and walked away. Holding an open palm against the throbbing, watery eye and a few feet from the hospital fence he heard the patients chanting, 14...14...14!

That was the day the man learned to mind his own business. He learned it the hard way!

Most economists and analysts argue the Dow Jones bottomed and began to trend higher on March 9, 2009. President Obama said four days earlier than that, buying stocks is a potentially good deal if youve got a long-term perspective on it. The rally that quickly unfolded turned out to be the biggest, most bullish in all of history. And based on where equities are now trading, the bull trend remains firmly intact.

I tip my hat to President Obamas forecasting abilities. It was likely the best forecast in history for the stock market. I tip my hat to Mr. Obama for not minding his own business and encouraging long term investors with, thus far, what was the buy of the century.

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This morning, the Dow is off 270 points in follow thru weakness from yesterday when the market was off nearly 300 points. Here is what I had to say about such weakness with all markets yesterday and not simply the Dow. From the morning broadcast of my twice a day newsletter, Commodity Insite comes the following:

"Overnight, Trump said a trade deal with China may not be in place until the 2020 election. Plus, the tweet he made yesterday is another new trade war with Brazil and Argentina. In addition, he says tariffs will be placed against Italy because of a tax they placed on US tech. companies. Such talk has the Dow off another 180 points but thus far, grains are a bit higher."

It appears we now have a trade war with China, one with Brazil, one with Argentina and apparently one on the cusp of unfolding with Italy. Thank goodness, trade wars as President Trump has stated are, "fun and easy to win." Thank goodness!

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