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SOAR or CRASH, you can prosper with
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Dohmen
Capital Research group
was founded in 1977 by Bert Dohmen as an economic
and investment research firm.
Our mission has been to provide serious investors and
traders with the most profitable investment
and economic advice, available
anywhere, via subscription services.
The advice will always be unbiased and
will not have any conflicts of
interest. We don’t hesitate to give
sell advice, or to sell short, when
our work calls for it.
The analysis is designed to help you make the right
choices and decisions on how to invest your money and
prosper over both the short and long-term. Serious
investors will find a wealth of profit-making investment
and economic guidance.
Bert Dohmen's long time experience in
the markets will be working for you.
The
firm’s services have achieved the highest acclaim. Dohmen
Capital Research offers the most highly
respected and sought-after advisory services for
investors worldwide. The
first publication was THE WELLINGTON LETTER,
which has achieved numerous awards of distinction. It
quickly made its mark on Wall Street with often totally
contrarian forecasts, such as the 20% prime rate in
1980, the roaring bull market in gold and silver,
followed by the 20 year bear market, and a decline in
U.S. T-bonds of over 40% in the late 1970’s among
others.
(article by BERT DOHMEN,
EDITOR of Bert Dohmen’s WELLINGTON LETTER (12-28-09)
The multi-trillion dollar infusion of credit and guarantees
by the Treasury and the Federal Reserve in 2009 haven’t
anything to produce an economic recovery. However, they have
taken the risk out of speculations. Private debt has been
transferred from financial institutions to the Fed, although
for many decades the Fed was allowed to buy only AAA
securities. Now they are being everything but the proverbial
“kitchen sink.”
The efforts of the Fed have been geared to preventing a
recurrence of the financial crisis. It’s been a very expensive
effort. However, it has flooded the banking system with huge
liquidity. That has produced one of the steepest yield curves
in history, i.e. short term interest rates are far below long
term rates. The Fed and government thought all this liquidity
would be used for lending. But banks find it much safer and
easier to borrow money at 0.25% and then buy US Treasuries
yielding 3.5% or more. No loan exposure, no need to look at
financial statements or take the risk of being accused of
“discriminatory lending.” More...
GOLD: NEW HIGHS AHEAD?
September 22, 2009.............In late May we advised to sell
positions in the gold sector because of the typical seasonal
weakness during the summer. We also said that we wanted to get
back in during September. Gold declined from 994 to a low of
907 during the summer. In August we thought that there might
be one more dip to the 900 level, but it didn't happen. Well, it is September and the chart of gold has just turned
very positive. Recently gold had the highest closing price
this year. The seasonally strong period for gold has now
started. The rally should go at least into February with a
possible correction in December. But the ride in gold is
always very volatile. It's like riding a bucking bronco. The
convictions of the bulls are always severely tested.
More...
IS
IT STILL A BEAR MARKET RALLY OR NEW BULL MARKET ?
August 24, 2009
The big question
on the minds of investors is whether this is a new bull market, or
merely a bear market rally. We don't care much for these labels,
because their meaning has to be defined. So far, all the evidence
suggests it’s a rally in a major bear market. However, the popular
opinion amongst analysts is that this is a new bull market. Although
we issued a buy signal at the exact bottom in early March, and then
called the correction going into July (now mostly forgotten), we
chose not to participate thereafter. You know the reason: straight
from our charts and indicators. They showed that there was strong
"distribution" lately. This means the pros have been selling to the
masses, i.e. mutual fund managers. In our view, it's better to miss
a boat than to catch one that sinks. Over the years we have found
that our indicators are more reliable than our emotions, although
they are not perfect. To be successful, you have to have a
disciplined approach. More...
Expect: Big Rebound in GDP to
be followed by "Double-dip"
By Bert Dohmen, August 4, 2009
Last month, the headline of our
WELLINGTON LETTER was: "Prediction:
Strong GDP Growth in late 2009 will be a Bull Trap!"Now we are seeing
others talking about the "great recovery", the "end of the
recession," etc. On March 6, the exact day of the bear market
bottom, we gave a "buy" signal, stating that the rally would
be more powerful than even the bulls would believe. There will
be pullbacks and corrections, but over the next six months the
bulls will do better than the bears.
Why do we think that GDP growth will be very strong late this
year? The comparisons will be against one year ago when the
global economies were plunging off of the cliff. Those are
easy numbers to beat.That presents some good opportunities. As traders and active
investors, we must take it one step at a time. The important
part for now is that much stronger GDP growth numbers later
this year will fuel bullish sentiment and the mirage that
everything is just wonderful. The only question, how much of
this is already built into today's stock prices? More...
STOCK
MARKET: BEAR MARKET RALLY PHASE II
August 4, 2009......
We hear from
analysts that the credit markets have eased, that banks have
been able to raise capital. They tell us about the strong
rallies in junk bonds and more risky investments, which are
all supposed to harbingers of a recovery and a new bull
market. I
disagree.
Bear market rallies occur in everything after a record
shattering plunge. The current global crisis was stopped just
hours before a complete meltdown last year. Trillions of
dollars were injected by the central banks, either by way of
guarantees or computer-generated credit. Armageddon was
avoided. But that doesn’t necessarily make for a recovery.
More...
THE "REFLATION TRADE" HAS REPLACED THE "ARMAGEDDON TRADE"
June 25, 2006......
The great fear last year was unstoppable
"deflation" and a financial collapse. The "Armageddon Trade"
really worked well in 2008. This involved trading the "end of
the world" scenario. It included "gold, guns, and Treasuries."
It was a flight to safety, expecting the worst. According to
authorities, including the Bank of England, ECB, and the IMF,
the world got within hours of a financial meltdown last
October, just as predicted in our book of late 2007, PRELUDE
TO MELTDOWN. The world was saved, with injections of several
trillion dollars of liquidity and governmental guarantees in
the U. S. and Europe. The world has never seen central bank
injections of this size. The money is created out of thin air.
I call it "cyber money." It's so much more efficient than in
the old days, when they actually had to print money. More...
MUSTARD SEEDS or
TERMINAL VELOCITY?
June 9, 2009...
In the media, virtually every economic statistic released is called
a "mustard seed" or a "green shoot." When the job loss goes to
540,000 from the prior 650,000, they cheer just because the rate of
job losses is decelerating. They don't even point out that the
statistics are greatly manipulated to make them look better. We
actually have over 23 million people unemployed right now, which
includes the "discouraged" and part time workers. Be year end, we
could be closer to 30 million. The "green shoots" refer to the
statistics showing a lower rate of acceleration. That's why you
often hear the words "second derivative" which comes from higher
math and is the expression for "acceleration."
More...
June 8, 2009... BEAR
MARKET RALLY, NOT A NEW BULL MARKET
The stock market has had an eye-catching rally.
Everyone is talking about the S&P 500 gaining 40% since
the March 6 low. But we have to put that into perspective. The
index dropped 46% from the October 2007 top to the March low.
Just to get back to the level of October 2007, it needs almost
a 100% gain. So, it is quite short of that. In fact, I
believe it will take a decade or much longer to get back to
the 2007 top.. During the Great Depression, the first
phase of the bear market ended in 1930. Then the DJI rallied
51%. But after that, the DJI plunged another 64% into the
1932 low.More...
June 7, 2009.... PROFITS
OR ACCOUNTING MANEUVERS?
Banks have been reporting surprisingly good
earnings. Just a few months ago it appeared that the entire
banking system would shut down, or be nationalized. And now
they report billions of dollars of profits. What's going on?
Well, first of all, the "mark to market" rule was changed as
we reported two months ago. That gives banks breathing room.
It was necessary. But now banks are taking advantage of it and
reducing "loan loss reserves." In other words, if a bank sets
aside $5 billion for losses of assets in its portfolio, now it
may decide it only needs $2 billion. Therefore, it reduces the
loss reserves by $3 billion and puts it into earnings. And
thus, suddenly there is a $3 billion profit. More...
SHOCK AND AWE
from WASHINGTON
March 24, 2009.....
Thomas
Jefferson said in 1802:
Banking institutions are more dangerous to our liberties than
standing armies. If the American people ever allow private
banks to control the issue of their currency, first by
inflation, then by deflation, the banks and corporations that
will grow up around the banks will deprive the people of all
property until their children wake up homeless on the
continent their fathers conquered.
TRILLIONS MORE FROM THE FED AND TREASURY: Last week
we got "shock and awe" from the two-day Fed meeting and the
subsequent announcement. Interest rate goals remained at
0-0.25%, but it was the rest of the announcement that
propelled the markets. The big item: The Fed basically decided
to inject another huge $1.25 trillion into the financial
system. This is in addition to the $1.8 trillion it has
already put in. More...
THE BEST BEAR MARKET RALLY YET: Technically
the March bottom looks good so far for a rally. We caught it
right on target (in fact, to the hour) on late Monday
with Friday's (March 6) message, not after the fact.
The big rally started the next morning. How is that for
catching the bottom?
Hopes are
that the economy will now recover because of the latest
actions by the government. My view is that it's like donning a
raincoat in a storm and hoping it will make the storm end. It
may keep you somewhat dry for a while, but it won't stop the
storm. The Fed and Treasury moves will only reduce some of the
damage, they won't stop the economic and financial
contraction. Although the actions will diminish the financial
crisis for awhile, nothing they did or will do in the future
will resolve the economic crisis.More...
GOLD: A "KEY REVERSAL" DAY
By Bert Dohmen, founder of Dohmen Capital
Holdings, Inc. March 2009
GOLD had a very important day on March 18. The
previous day we wrote in our SMARTE TRADER: "There is still a
chance that it will make one more trip below the 900 area."
We were looking for 885 for a target in case that happened.
Well, it did happen the next day, as gold tumbled in the early
hours to 883, but then soared after the Fed meeting and the
announcement. It reached a high of 954 within 90 minutes. It
was spectacular.
That's a huge reversal. The volume before and
after the low was very high. That makes this a "key
reversal." Such reversals usually mean that an important
low is in place. Furthermore, the chart formation I see now is
very bullish. The next target is over 1000 and then 1050.
However, first there should be a pullback. More...
WHAT IS "CAP and TRADE?"
From Stratford;
Cap and Trade Program , March, 2009
Our colleague
John Maulding quoted an analyst from Stratford on "Cap and Trade."It
gave a good description:
One of the
most ambitious proposals of the Obama energy plan is a national cap
and trade program. Under such a program, the government would set
emissions standard for various industries, allowing companies that
emit less carbon dioxide than their allotment to trade their excess
"credits" to those who are emitting above the cap. The initial
allotments of carbon credits will incite one of the more contentious
domestic debates in the coming years, as will the steepness of the
emissions reduction curve. In addition to a national goal of 80
percent by 2050, there are questions about what the goal will be in
2020 or 2035. More...
