The Idiocy of Canadians

by JDH on December 6, 2008

Today I will keep my comments brief, because not much has changed since last week when I explained why I’m a pessimist. The markets staged an impressive rally late in the day on Friday, and managed to end the week about where the week started. In fact, other than Monday, there were good rallies before the close every day this week (as though someone is trying to prop up the market, but I digress).

My comments will be brief, because I don’t know what to say.

On the one hand, here’s a good article from the conservative National Review explaining why President Obama may be just the change we need. I’m a Canadian, and every time I say something bad about Americans and their elected representatives I get lambasted on the Forum, so linking to this article is my attempt to say that yes, Obama may be just what the doctor ordered.

Sometimes a new coach for a sports team improves the team’s performance, just because they are a different coach. Sometimes change for the sake of change is a good thing. Given the problems in the market, I hope so.

Of course the other reason for my conciliatory tone is that we Canadians are certainly looking like a bunch of idiots this week. I don’t want to turn this blog into a political commentary, so you can read more here about why we Canadians look like fools this week.

I still continue to believe that the manipulations in the gold market are drawing to a close, and much higher prices will be seen in 2009. Here’s a good article that explains why the Comex gold market may collapse.

Here’s another excellent article explaining gold price manipulation.

Yes, I know, you all think I’m some kind of nut for suggesting that investors will begin taking increased physical delivery of gold from the Comex, and that will causes gold prices to spike upwards. It hasn’t happened ever, so why should it happen now?

Maybe it won’t, but gold has been a store of value for thousands of years, and I believe it will be again.

Okay, one more article, that alludes to increased insider buying of gold shares.

I’m still maintaining a significant cash position, because tax loss selling may be brutal over the next few weeks. Here in Canada I can sell a stock at a loss, and carry that loss back up to three years and apply it against capital gains taxes I have paid in the past. If I have a loser, selling it and getting a tax refund makes sense. (Remember all that money we made and paid taxes on in 2006? It would be nice to recover some of that tax, wouldn’t it?). I’m not a tax expert, but I don’t think Americans can carry back capital losses, but obviously a loss is a loss, so tax loss selling may continue everywhere in December, which means it may be early January before renewed buying makes sense.

Finally, I have an announcement to make.

Obviously this year my predictions, like virtually everyone else’s, have been completely wrong. If I was smart I would have cashed in 18 months ago, and sat on cash. Instead, my portfolio is down huge, as is most everyone’s. So, here’s the challenge for 2009:

I would like you to write one page of predictions for 2009. What will happen with the markets, with gold, uranium, etc? Two weeks from now I will publish a special e-mail address where you can send me your predictions. I will then create a separate, permanent page on this website for your predictions. You can put whatever you want on that page. You can make it as long or as short as you want it to be. You can even put links on the page to other sites of interest.

I will ask you to predict the following levels on March 31, June 30, September 30 and December 31, 2009:

Gold, uranium spot, Dow, S&P, and whatever else you want to predict. You can also include your top stock picks for 2009.

On December 27 I will not write a weekly commentary. I will instead take all of your input and create pages, and then summarize them so we have a consensus of where the group thinks the markets will be in 2009.

More details to follow. Sorry, no prizes, other than bragging rights during 2010.

Feel free to leave your comments on the Forum, and see you next week.

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