John Mugarian's Dynamic Growth

The economy is still in the tank, but the market keeps rising. The real skinny hear is manipulative forces are at work, and it's tough to fight an manipulated market. The real tragedy is mutual funds and investment managers are being forced into the market. Being out of the market, and getting your performance scrutinized at year-end can be a death spiral for many investment professionals.

If you stop and think about it, it's a double edged sword. Once these managers are all in, and the market tanks, they can always blame the market. When you're out and under-perform, there is no one to blame. So, in short, even if investment pros believe we are in a bear market rally, they are going to risk your assets to keep from having assets flee for under-performance.

I believe the following quote from Louise Yamada makes the most sense;

"Better to be out of the market right now wishing you were in.. than in the market wishing you were out".

Yamada believes, as I do, that we are in a bear market rally. Here is an interview she did a few weeks ago- Video

"We are on the verge of a global transformation. All we need is the right major crisis and the nations will accept the new World Order."

David Rockefeller

As politicians continue to follow the agenda laid out by the globalists (The New World Order Gang), the media is telling us that their chief puppet, Barrack Obama, is traveling to Asia to figure out why their unemployment rate is lower than ours.

Since the globalists shipped our manufacturing jobs to places like Singapore and South Korea, is there any wonder why their unemployment rate is 3.4%, and ours is stated at 10.2?

Obama arrived in China on Sunday, and told the Chinese that they could no longer rely on U.S. consumers and Asian exports to drive global growth. Oh, no kidding! Don't you think our consumers having less jobs, no money, no credit, and high bankruptcies has anything to do with it?

To replace the higher paying jobs that were shipped overseas, the globalists replaced the loss of wealth with a stealth bull market in real estate, and combined it with 100-120% financing. This in turn made "some" Americans feel as though they were rich, when all along it was nothing more than a diversionary tactic.

Obama went on to say, "We have now reached one of those rare inflection points in history where we have the opportunity to take a different path."

Boy, I'll say! China, and other nations who were the recipients of exported U.S. jobs are getting stronger, while the U.S. continues to get weaker?

To say that the exporting of U.S. jobs was by design would be the understatement of the year. Here are a few things to think about.

1) Why are GM's variety products in Europe better than the products offered to us in the United States?

GM Europe- Vehicles

If GM had the same products in the U.S. as they do in Europe, they would have never had to file for bankruptcy.

2) This morning GM announced, starting next month, that they were going to repay $6.7 billion of the $49.9 billion in aid it received from the federal government. Where are they getting the money to do this?

I believe GM filed for bankruptcy to get rid of some legacy costs, and to break the unions. Clearly, GM had been offering better products in Europe than those offered to consumers in the U.S.. But, to get what they wanted, the perception to the public had to be one of ineptness, and a company whose products were out of touch with it's consumers. It worked!

Now with a new cost structure, GM is saying that the "company is able to start repaying aid because it has a stronger financial position than anticipated". Oh, OK...

Here are our Top 10 ETF's for the week of November 16th:

1) DBA: Powershares DB Agriculture Fund
2) IGF: iShares S&P Global Infrastructure Index Fund
3) DBE: PowerShares DB Energy
4) IYW: iShares DJ US Technology Sector Index Fund
5) IYF: iShares Dow Jones US Financial Sector
6) DDM: Ultra Dow 30 Proshares ETF
7) SDS: UltraShort S&P500 ProShares
8) CASH
9) CASH
10) CASH

Here are our Top 10 Fidelity Sector Funds for November 2009

1) FSPTX: Technology Portfolio
2) FSRBX: Banking
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSENX: Energy
6) FSCSX: Computers & Software
7) FNARX: Natural Resources
8) CASH
9) CASH
10) CASH

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

I don't know any more about Meredith Whitney other than what I read, and hear her give opinions on the financial channels. One thing I have concluded however, is she has been right, and has guts.

Being right is good enough, but having guts to go along with it is a very rare thing. Why? Well that's any easy one.

Whitney singlehandedly shock up some of the most powerful forces in the world, the nations biggest financial institutions. In 2008, and early 2009 she pulled back the covers on GS, MS, C, BAC, and a host of other financial heavyweights exposing their misdeeds to the public.

Now Whitney is giving another warning.

On Monday, Whitney gave this interview on CNBC- Video

In the "I Don't Care" news of the day, CNBC's David Faber reported that Lazard appointed Kenneth Jacobs as CEO and chairman, replacing Bruce Wasserstein who died last month.

I really don't understand the relevance this story. Do we, the small investor, really care who Lazard picks as their next CEO? I could care less. Oh, it must be important in New York.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

You may not believe this, but I actually agree with John Paulson's recent call on Bank of America (BAC). I have told clients, if you could fast-forward 10 years, imagine a time when the banking problems are a thing of the past, and the financial train wreck is distant memory.

If Bank of America survives the recent debacle (which I think they will) , imagine where the stock price would be if the economy returns to normal, and the dividends are reinstated back to the 2007 levels of .64 cents a quarter, or $2.56 per year. Can anyone guess? My guess is $45-$55.

At the current price of $16.34, you would be holding a stock with a dividend yield of 15.66%. This being said, we must remember what Meredith Whitney said a few days ago too. As attractive as BAC may be, looking forward 10 years from now, you need to keep in mind that better buying opportunities make exist in the months ahead.

If you like to dollar cost average, I would buy a little BAC at current levels (or hold what I had), and buy more in the months ahead if the share price drops.

While I can't be certain of this , but I smell an amount of stock pumping happening on BAC shares right now. Bloomberg and CNBC have been reporting the Paulson news all day long. Bloomberg actually mentioned Warren Buffett's position In BAC while reporting the Paulson news. This is all well and good, but Bloomberg failed to mention that Buffett also sold a sizable amount of his BAC position a few short months ago.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

The DJIA closed down 93.87 points today, but closed above their worst levels of the day.

Right out of the box, investors got news that the jobless claims numbers are still horrible, foreclosures on prime mortgages and home loans insured by FHA rose to 30 year high, leading economic indicators rose less than expected, and basically all the cheer-leading about the economy was a bunch of bullshit.

Can anyone say, Double-Dip?

I will not use the term myself since I believe the economy never recovered from the recession in the first place. The short term lift in economic activity was nothing more than a blip on the screen. Obviously, the blip was helped by the printing of more monopoly money. While the Fed may have plenty of paper left, they are quickly running out of ink.

You are being lied to folks. That's as simple as I can put it.

Recently, Goldman Sachs CEO, Lloyd Blankfein made the comment that Goldman Sachs did, "God's work." How about the arrogance of that statement!

I think we should cut this little lady loose in the executive office of Goldman Sachs to teach these people a lesson- Video

We better be careful when criticizing Goldman, we don't want to make them mad, and have them push a button and crater the stock market.

There are several people who have paid the price for criticizing Goldman Sachs, and even the New World Order gang. Here are a few who paid the price, and a few who are still talking.

Dylan Ratigan- lost his job at CNBC, now with MSNBC.

Lou Dobbs- lost his job with CNN by putting into focus the New World Order Gangs agenda.

Glenn Beck- On the New World Order Gang.

Jesse Ventura- Has a new TV show coming out in December called "Conspiracy Theory"

Max Keiser

Jim Rogers- Moved his family from NY city to Singapore.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

After leaving the public speaking circuit, and newsletter business a few years ago, I am beginning to get my second wind. I am doing this because the Dynamic Growth website is an intellectual property. Our goal is to deliver more actionable advice to individuals serious about investing, and build this website into a first class investment service.

To do this, I will be restructuring the website, and want to keep the information exclusively for members who enroll in the service. If I am going to spend multiple hours providing new and exclusive content to the site, investors who access the "Newsletter" portion of the website will have to enroll by establishing a "username" and "password".

Here are some of the changes we will make to the website;

1) The Dynamic Growth "Weekly Briefing" will only be available in the "Newsletter" portion of the website, and no longer be available on the blog page.

To access the "Weekly Briefing", investors will need to establish a a "username" and "password" to enter the "Newsletter" link.

2) The Dynamic Growth "Weekly Briefing" will be expanded, and will provide members with the following;

a) Top 10 Fidelity Sector Funds:

We will enhance this area by occasionally recommending Fidelity funds that are not sector specific. We will also, from time to time use non-fidelity bull or bear funds to hedge, or enhance returns.

b) Top 10 ETF's:

Sticking to the sector investing theme, we will use sector, sub-sectors, currency, bond, hedges, and entire nation ETF's to enhance performance.

c) Top Stock's Portfolio:

This is a new feature to Dynamic Growth. We will provide members with buy/sell/hold advice on stocks that we feel will beat the market. This will include the top large cap, mid cap, and occasionally small cap stocks that we feel exhibit superior fundamentals.

Another enhancement we will add is;

d) Under Loved, and Under Appreciated Stock List:

The Under Loved, and Under Appreciated Stock List will be a list of stocks that have significantly sold-off in overreaction to the bad press or fear. While some of these stocks have gone down for good reason, others may have fallen victim unjustly.

We will not actively recommend any of the stocks on this list, but make you aware that some of these stocks may be great turnaround stories, and some may not.

3) We will announce any actionable "Flash Alert" notifications on the blog page. To access the information contained in "Flash Alert", you will have to lo-gin to the "Newsletter" portion of the website.

These "Flash Alerts" will provide members with immediate, actionable, and timely advice.

4) The "Journal" portion of the website will continues as a blog. Here we will update you on hot stories of the day with a "Bird's Eye View" of what we think is going on.

Providing a service such as this is very time consuming, and costly. In 2010, we will convert the "Newsletter" portion of website to a paid service. If you like what you see over the remaining days of 2009, we will offer subscribers with a special introductory offer on the first year subscription.

For the rest of 2009, the newsletter is free. There is no obligation, just sign up and give it a try.

Like I said, I've gotten my second wind, and I'm ready to get back on the public circuit...

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

As promised on Friday, the Dynamic Growth weekly Newsletter has been posted on the "Newsletter" portion of the website.

We have made the following changes this week;

Top 10 ETF's:

-2 new buys, no sells.

Top 10 Fidelity Sector Funds:

-4 new buys, including a market hedge.
-2 new sells.

Top Stock Portfolio: NEW

8 New Stocks- powerful market movers.

Under Loved, and Under Appreciated Stock List

10 new stocks that we that feel have sold-off significantly, and have huge upside potential for patient investors.

Market Comments:

After the huge rally in the market since Labor Day, I feel the market is overextended, and due for a pullback.

This being Thanksgiving week, a lot of big players are taking off early, so while we will see rally attempts like today, I have doubts that they get very far.

Late December is usually a good time for the markets, but I would expect some profit taking as well as tax loss selling to begin creeping in soon.

If you've been following the news, Treasury Secretary, Tim Geithner, is catching a lot of heat from Congress, and the House Financial Services Committee approved adding Ron Paul's "audit the fed" bill to the financial-system reform package. Paul’s provision will allow federal reviews of the central bank’s operations, including its interest-rate decisions.

Stay tuned. This could get real interesting if congress can have some oversight to the feds activities.

To access the newsletter, Click on the "Newsletter" heading at the top of the homepage and set up a "username" and "password" to enter.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Before we get started with what is going on, I wanted to add a few housecleaning tips for new members to the Dynamic Growth Newsletter.

Yesterday, we listed added 8 stocks (on our way to 15) to our Top Stock Portfolio. When buying these stocks, please pay close attention to our recommend weightings and dollar allocations.

The stocks in this portfolio are broken into 3 categories;

Moderate- M
Aggressive- A
Very Aggressive- VA

As such we recommend that investor allocate their portfolio purchases in this manner. If you had $10,000 to invest, 60% ($6000) should go into stocks listed as Moderate, 30% ($3000) should go into stocks listed as Aggressive, and 10% ($1000) into stocks listed as Very Aggressive. We assigned a rating to each stock in the portfolio.

Secondly, in the Under Loved, and Under Appreciated Stock portfolio, we recommend that you invest equal dollar amounts into each stock. Currently, this portfolio holds 9 stocks.

Market Brief's

Yesterday, the DJIA soared 132.79 points after a stronger-than-expected report on existing home sales. If you drill down into the details, you'll see that the picture is not as clear as Wall street wants you to believe.

Clearly, big money bottom-feeders are entering the market. The average consumer is basically broke. For many consumers, coming up with the 20% down-payment for loans is almost impossible. They can't save, and they just don't have the money.

Secondly, if any home sales are going to rise, it has to be existing home sales. Why? Builders have stopped building. The glut of homes on the market is huge, so the building of new homes will not begin until the current inventory of homes is drastically reduced.

I am always amused by the arrogance of people. They were arrogant during the NASDAQ boom, and again during the stock market and real estate boom a few short years ago.

Here is an article from Time.com, on how Robert Prechter from Elliott Wave became famous by paying attention to the arrogance, and irrational behavior of people.

To piggyback on this theme, I found the picture below to be not only amusing, but partially true of how some people in our country (the arrogant) may think.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

After being disciplined, some consumers are wising up while others continue to add to their debt. The dumbing down of many American's have lead them into a sea of massive debt, almost to the extent that they are hocking their futures by spending money they don't have on things they don't need.

This dumbing down process began at the Department of Education (Video), and has been extrapolated into TV advertising. See they know you've been programmed to follow instructions, and are trained not resist the movement.

As an example, the talking heads on TV have been promoting "Black Friday" shopping for several days now. This morning, sales promoters on TV have been interviewed, and get this. They are using slogans like, "inventories are down, and you'd better get it when you see it".

What bullshit! These people are pushing people to buy stuff they don't need with money they don't have by using slimy sales tactics such as these. There is not product, in any store in the world, that you or I absolutely need. I may want a product, but I don't necessarily need that product.

Take for example clothing made by Ralph Lifshitz (Ralph Lauren Polo). Unless you have millions of dollars, and don't care what you pay, why in the world would I pay $75-100 for a shirt that his company manufactured for $5-10 dollars?

How about a Coach purse or bag? Do you really believe these items are worth $250-$500 per bag?

If you want to know what something is really worth, don't look at the retail price, just look at the trade in value.

The great American showman P.T. Barnum once said, "There's a sucker born every minute". The real question we must ask ourselves is, "Was he talking about us?"

Here are a few examples;

-Who were those people that lost their fortunes buying dotcom stocks in the late 1990's?

-Who were those people that lost their fortunes buying real estate at the top of the market from 2004-2007?

-Who were those people that voted for Barrack Obama in 2008 thinking he was going to end the wars in Iraq and Afghanistan?

-Who were those people that voted for the Republicans when they held power in the executive branch and both houses of congress thinking they were not going to spend as much money as the democrats?

-Who were those people that voted for Bill Clinton, after Ross Perot warned that a giant sucking sound (lost American jobs) would occur if NAFTA was passed. Perot was right.

-Who were those people that voted for these people thinking they would navigate the country responsibly, but instead got our nation deeply into debt.

Ronald Reagan left office, with the Total Debt around $5 Trillion, an increase of $4.1 Trillion.

George Bush Senior left office, with the Total Debt around $7 Trillion, an increase of $2.9 Trillion.

Bill Clinton left office, with the Total Debt was still around $7 Trillion.

George W Bush left office with a Debt of around $15 Trillion, which includes an estimated $5 Trillion in future war costs.

Barrack Obama has agreed to send 40,000 more troops to Afghanistan, and in June, the anti-war Democrats voted for a $100 billion increase to fund the wars in Iraq and Afghanistan.

I guess P.T. Barnum was right, "There's a sucker born every minute".

The question now is, how many suckers do you think will be adding to their debt today?

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

For those of you who have not established a username and password for the newsletter link, I encourage you to do so soon. Several new features have been added as well as changes to the DG ETF top 10 list.

I am excited about our new stock lists. We have a list of growth stocks as well as a list of Under Loved, and Under Appreciated Value Stocks that could gain 200%-500% over the next 3-5 years.

Simply go to the newsletter link at the top of the page to sign up. The cost is free until the first of the year.

Here are some of our comments in the Newsletter this week;

"The news, or excuse for Friday's sell-off was on news that Dubai World's debt problems some how affect the debt problems we face in the U.S.. I believe the Dubai issue was concocted as a U.S. problem to distract investors".

"As such, we need to remain nimble, and make changes to the portfolio that fit the current economic environment".

Today, the release of the Chicago PMI gave a short boost to the markets before sellers entered, and took prices down. After a 63% rise in the S&P 500 since March, investors are growing weary about corporate profits in the months ahead.

Clearly, the catalyst for taking profits came as word leaked out that department store sales are lagging optimistic forecasts after the Thanksgiving holiday weekend.

The National Retail Federation said more consumers were out shopping (looking or walking off dinner)) compared to last year, but on average they spent less.

Cost cutting has helped corporate earnings in recent months, but have not risen as much as stock prices and p/e multiples. The big question going forward is how can profit margins expand in light of a high unemployment rate, massive foreclosures rising, costs of energy and health care rising, and reduced credit availability? I don't think it can.

This being said, some stocks and sectors are still very attractive, and as long as consumers can get bargains, profits of some companies will continue to improve. Some stocks have been so severely beaten down, that they are trading below their book values. So, despite the rally, bargains do exist.