Monday, March 14, 2011

How Bad is Japan, Nukes and Charts

Good article from someone in the know.    Japan is bad, but not catastrophic, and the US is not going to get pelted with radiation.

Some of you may have noticed that the Nikkei chart was screaming short last week, see this post

I closed that short after an initial win, and then re-opened it, believing that shorting weakness is the way to go.    But if you short and let the bounce happen (78% these days), you will lose all your potential profits.

Therefore my strategy of late is to buy to  cover the short at market (not sit with a stop overhead), and then put in automatic order to re-short on continued weakness.    

Sorry for the people of Japan, in theory I am visiting next month, but we will have to reassess as things calm down over there.    Japan will rebuild, and fairly quickly.   Some of the northern cities are pretty "old school" even where alot of the young people moved away to be in bigger towns like Tokyo or Osaka.    They might have a tough time of it without a real source of productivity (young people).  

The estimates are $100B, I bet Japan spends $500B on new infrastructure before this is all over.   Here-in lies the hope for Japan --that $500B is going to buy new buildings, new jobs, new trucks and excavators, new cars, new hope.    And it will go to construction workers, who will put 105% of that money back into circulation.

In America we took a few trillion and handed it to criminal banksters while also inflating silly "assets" like stocks that are nothing more than a fleeting electron on a HAL 20000 high frequency trading computer.   Keep this in mind....think if you amass all your wealth into some electrons.  

The deception runs deep, very deep.

Buy and hold is dead.   The P/E is around 22 to 23, if you believe the E numbers, it could be higher.   Historically, the long term return, say in the next decade is just awful.   That is what we are set up for.  No one wants to take their medicine, just kick the can again, and again, and again, and again.    Check MISH for a good summary on the P/E, even Hussman quoted MISH.

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