John Mugarian's Dynamic Growth

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

I took a short break from making comments on this blog. I did this for several reasons, but mainly because of a comment that my great grandfather made after he reached his 100th birthday.

When he reached this milestone day, a large newspaper came to interview him. Towards the end of the interview, the news writer asked if he had any advice for the younger generations. He said, "no." They asked him, why not? In his infinite wisdom, he said, "because they wouldn't listen anyway."

My great-grandfather was not only wise, but he was right!

People like me are fighting an uphill battle. Despite what we say, most investors believe what they believe because they heard it on TV, or read it in a financial publication.

They believe all this crap, and end up getting taken by the sources that provide the information to the media.

Facts are facts, and here are a few;

In 2000, investors believed the TV hype of the internet and dot-com stocks only to later watched the NASDAQ fall 78% wiping out many families lifesaving's.

Believing that they still deserved eye popping returns of 20%+ per year, these same pied piper (TV) investment children thought switching to commodities, hedge funds, and real estate was a smart idea. Shortly after getting in, sub prime mortgages began to implode, and the stock market fell another 57%.

After being burned twice by the market, and once by real estate, investors are once again looking for a way to lose the rest of their money by piling into bond funds. Bond funds seem to make sense to the unsuspecting since their is no interest to be had in Cd's and Treasuries.

In 2009, investors put $375 billion into bond mutual funds while withdrawing $53 billion from U.S. equity funds. It makes you wonder what is in the water since the stock market rebounded 23% in 2009, and bonds are sitting on the edge of a dramatic decline.

Like anything worthwhile in life, sometimes its best to sit and do nothing.

As an example, after the dramatic real estate decline, investors long the Gulf Coast were sure that a 30-40% fall in beach front real estate was a great deal. After factoring in higher insurance costs and taxes, I wasn't sold on the idea.

Now these new beach front investors are facing another problem...Oil front property! I not real sure what the demand will be for beach front, oil front property in the future.

Beach front property, like the stock market is different today. This being said, you have to play the game differently. It's a "Hokey Pokey" market.

Here are the lyrics;

You put your money in,
You take your money out;
You put it in the bank until another shake out.
You do the Hokey-Pokey,
And wait for the next decline.
That's what it's all about!

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

On Monday, I told you the stock market is different today. I said, you have to play the game differently. It's a "Hokey Pokey" market.

Here are the lyrics;

You put your money in,
You take your money out;
You put it in the bank until another shake out.
You do the Hokey-Pokey,
And wait for the next decline.
That's what it's all about!

If you continue to believe all the crap you hear on the financial channels, you'll get wiped out.

The stock market today looks more like this;

And, not this;

The selling we have witnessed today is not "natural selling". This sell-off was not caused by mutual funds or the small investor. This selling is unnatural. The casino owners are rigging the machines and, creating a panic.

Never forget, the market is controlled by a big club. And, you're not in it!

Watch this George Carlin video, he hits the nail on the head.

Now the media is saying that today's sell-off was caused by a TRADING ERROR AT A BIG INVESTMENT BANK!

If this doesn't convince you that the market is controlled by a big club, there is no hope for you.