WALL STREET REVELATOR

The Boston Globe reports one of the last century’s top innovators has died… Ken Olsen, cofounder of Digital, dead at 84.

- Andy

Think about the future too much… and you can forget about the present.

I love it when certain politicians use the term American Exceptionalism as a buzz term for some sort of American purity… man do they have it wrong… or, they think everything but The Constitution can be reinterpreted.

Quite simply, Alexis de Tocqueville’s coined the term in his 1835 book “Democracy in America.” He used the term to describe how the American ideal was a strong magnet for immigrants…

That would come as a surprise for politicians who believe the American Dream is for Americans only… and who use American Exceptionalism to describe that emotion… but, that’s what happens when you have presidential wannbees who haven’t read a history book since high school… and whom I guarantee you have never read Tocqueville.

But, it goes perfectly with what I have always claimed to be the best solution for the immigration problem… we need to stop telling the world how freekin’ great we are… Keep it a secret and the American Dream would be for Americans only.

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Sooner or later the gold-before-all crowd is going have to admit something… while the shiny metal has grown stagnant, stocks are making investors money.

At our Carpenter Global Stock Advisory newsletter we have a nice slice of stocks that are up between 17% and 77% in the last four month… all while gold slid.

So, it was no surprise today to learn that the Dow Jones industrial average added 83 points, or 0.7% to close at 11,755.44 – its highest level since September 2008.

Yup, we are constantly bombarded with all the nukes that hide among the financial world… but the people who are selling us that crap are only interested in being correct every 10 to 15 years.

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Here is a brief, abridged excerpt from Lynn’s Page One piece in the October 2010 Carpenter Global Stock Advisory newsletter —

Read the truth here!  Right now, the stock market is exactly where a smart investor would like it to be. Today, stocks are cheap, and corporate earnings are beginning to climb, which gives those nice, cheap stocks reason to rise.

Not that you could tell the situation was so good from the way investors are acting.  But, stocks only get cheap when most people are scared and running away from them. And, even sober, highly professional money managers with excellent track records are down on stocks these days. 

But 15 is not the historical average despite a million rumors to that effect. Ned Davis Research has crunched the data carefully. The average for the S&P 500 over the past 50 years is a P/E ratio of 17.6. That’s average, I repeat. Not high.

Over the more recent 25 years, the average is 20.7. OK, throw that one out if you like. There was a hefty bubble back in the 1990s.

Even if you go back to 1927 to include the dismal decade of the Great Depression, the 74-year average for the S&P 500 refuses to dip below 15.9. Round that off and you’re at 16, today’s valuation.

But if roughly 16-18 is average, what is an expensive P/E for the index?  According to Ned Davis again, the S&P 500 becomes expensive above 20.

Let others be afraid and pass rumors. We don’t know what will happen, but we certainly do know that the odds are strongly on the side of those who invest now.

We are no longer the nation that used to amaze the world with its visionary projects. We have become, instead, a nation whose politicians seem to compete over who can show the least vision, the least concern about the future and the greatest willingness to pander to short-term, narrow-minded selfishness.

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The recession seems to be socking Americans in the heart as well as the wallet: Marriages have hit an all-time low. But, pleas for food stamps have reached a record high as the gap between rich and poor has grown to its widest ever. Both facts are revealed in US Census data released today.

The figures also show that Americans on average have been spending about 36 fewer minutes in the office per week and are stuck in traffic a bit less than they had been. But that is hardly good news, either. The reason is largely that people have lost jobs or are scraping by with part-time work…

The exception, of course, are the fully employed bankers’ crowd, and their lobbyists, whose unfettered Bush-era greed and corruption led to the economic collapse. They have to be loving the fact that they can tool their BMWs and C-Classes along the more roomy expressways.

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