Sorry for the late post, but I've been busy trying to console investors who made the mistake of having their accounts with a brokerage firm. The horror stories are many, and as Warren Buffett says;

"You don't know who has been swimming naked until the tide goes out..."

The important lesson in markets such as these is to one, stick to an asset allocation model, and secondly, don't be afraid to sell during euphoric times despite what your accountant may say.

I have some important contrarian tidbits to share with you this week. The first one is the recent criticism of Warren Buffett by Doug Kass, and recently Barron's. Once again, you had to be around the markets long enough to remember the last time the media focused on the criticism of Buffett. I was around then.

The year was 2002, the date was March 15th, and the publication was Business Week.

The above article just about marked the bottom for Berkshire Hathaway (BRKA & BRKB) stock as it started its meteoric rise from a low of $40,800 to $151,650 in a little over 6 years. I'll take a 371% return any day, and I'll be willing to wait a little over 6 years if need be.

Don't you love it when hedge fund managers short stocks like Berkshire Hathaway, and then are allowed to have a media sounding board that drives the stock down and allows them to profit even more? It happens all the time.

Others getting face time are the doom and gloomers. Whether this is by design or not is anybody's guess. I must say that I agree with Bill Cara (billcara.com) that;

Just like a big ocean liner, the stock market needs time to change directions, to transition from obvious Bear to obvious Bull. Large syndicates or pools of money need time to accumulate positions, their lines so immense that multiple brokers are used to complete the order, and many sell-offs needed to buy into weakness. These buyers have a vested interest in obtaining the shares at the best possible prices with as few investors on board as possible, so stories have to be floated (sorry, I mean broken by responsible reporters) in major media outlets in order to create fear, panic, hopelessness, and finally apathy so they can acquire such large amounts of stock.

It's just the Wall Street game folks. The rich have been doing in to the poor since the beginning of time.

Some brokerage technical analysts have put the markets on "death watch". I guess they can do things like that since the have the ability to push a button that sells massive shares of stock to create a panic. Wall Street firms who can trade against the investor for their own account like to do things like that.

What's becoming increasingly clear is a retest of the November 2008 lows looks like a real possibility. The crooks up in Washington refuse to work together as President Obama’s call for bipartisan cooperation was has been ignored. The House of Democratics passed a stimulus bill laced with pork, and the Republicans who allowed Wall Street and the oil companies get away with economic murder want a say in what pork they want in the bill. It's a big mess and the stock market knows it.

I find it astonishing that the politicians have no regard for fixing the U.S. economy, and helping its citizens get through these troubled times. Granted, many consumers are financial idiots, but when all is well they think their geniuses. The current economic problems will serve as a well deserved disciplining process.

Speaking of lack of discipline, the idol of many teens and Wheaties lovers saw their hero bite the dust today. A photo of Phelps smoking marijuana out of a bong at a party should piss you off enough to go rip down his poster from your child's bedroom.

I guess it depends on your morals however. If your going to have his poster up;

Put this one right next to it;

In short, the Michael Phelps problem is not just his problem. It's a societal problem. I was watching a reality TV show yesterday that brought to light the disciplining problems principals have at high schools across the U.S. One student was sent to the principal's for cheating on an exam. The principal said; "that isn't the way to success in life". I thought, he's wrong! Cheating, isn't that what they do on Wall Street? Cheating, isn't that what the analysts and Wall Street executives did during the NASDAQ bubble?

Cheating needs to be called out on the carpet regardless of who the cheat is.

Russian Prime Minister Vladimir Putin verbally attacked Wall Street and the New World Order gang in his first appearance at Davos. The NWO gang is deeply entrenched in the upper tiers of our government, and Putin said;

The crisis was a “perfect storm” that had arisen from a world dominated by one power, the US, and that only a rebalancing of global power could cure the problem.

“There is a temptation to expand direct interference of state in economy. In the Soviet Union that became an absolute. We paid a very dear price for that.”

Our politicians and big business have a strange way of getting us to believe the unbelievable. Through the media, the tell us what to think and how to think. They tell us things we can say, and things we can't say. Believe it or not, all this is done under the umbrella of making us think we are a free and open society.

For example;

Wall Street and politicians love communists. Yes, I think that is quite obvious. They love China and Vietnam since they are good for big business in the United States. Any communist nation that is not good for big business, Wall Street, and our politicians are known as “bad communists”.

So, as I watch the embracing of the “good communist” (China and Vietnam), and the condemnation of the “bad communist” (North Korea and Cuba), I am reminded of a phrase from the "Wizard of Oz"; "Are you a good witch or a bad witch?”

Among the "good communists", it is estimated that about 58,000 of our servicemen were killed in Vietnam (with support from China and Russia) , and during the Korean War, China joined with the North Koreans on November 26th, 1950 in fighting a military offensive against General MacArthur and the American military. From 1950-1953 it is estimated that over 30,000 American soldiers were killed in battle.

So, the now "good communists", were either directly or in directly responsible for the killing of around 88,000 American soldiers. I guess our politicians and big business don't care that this happened since they love to trade, and outsource American jobs to Vietnam and China.

Let’s focus on the "bad communists". Korea with the help of a good communist, China, was responsible for 30,000 American deaths, but another bad communist, Cuba, was responsible for the deaths of 4 American pilots during the 1961 invasion of the Bay of Pigs.

So, is this the way it works? If a country, even though communist, helps big business profit through cheap labor, outsourcing, and oil, it’s declared a "good communist". And, if not, you are a "bad communist?” I think I get it.

Going a step further, if you are not communist, have oil, and don't allow our big oil companies to go into your country and take over, you are bad too.

What I am trying to do by rambling on with all this stuff is to get you to think. I don't know what the answers are, but you do need to stop and think about what is going on around you. I am real big on thinking outside the box. Some people use the term as a cliche, but if you can honestly look at both sides of an issue, things become abundantly clear.

Unfortunately, too many people have their minds locked up. They are either republican or democrat, conservative or liberal, black or white. Think more in terms that none of the above truly exists. If we do this, now we can invest.

Here are our Top 10 ETF's for the week of February 2nd:

1) DBA: Powershares DB Agriculture Fund
2) EWZ: Brazil Index
3) DBE: PowerShares DB Energy
4) USO: U.S. Oil Fund
5) EEB: Claymore ETF BNY BRIC
6) DDM: Ultra Dow 30 Proshares ETF
7) GLD: SPDR Gold Shares
8) IYF: iShares Dow Jones US Financial Sector
9) PGJ: PS Golden Dragon China Fund
10) SSO: ProShares Ultra S&P500 Trust

Here are our Top 10 Fidelity Sector Funds for February 2009

1) FSCHX: Chemicals
2) FBIOX: Biotechnology
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSPTX: Technology Portfolio
6) FSCSX: Computers & Software
7) FSCPX: Consumer Discretionary
8) FNARX: Natural Resources
9) FSENX: Energy
10) FSRBX: Banking