September 2008 - Forecasts & Trends

The credit crisis has led to gridlock in the financial markets, and the stock markets have dropped like a stone. On Saturday, the Treasury Dept. and the Federal Reserve requested a massive $700+ billion bailout package that would allow the government to buy up troubled mortgage-related assets from banks and financial firms that are in trouble. Congress is reluctant to go along, but I expect they will provided they also get some money to help struggling homeowners and more oversight than the government offered initially. This week, we take a look at the latest enormous bailout plan and the latest government guarantee of money market funds. I also tell you why I believe we are now headed for a recession, and why I believe this huge financial mess will likely make Barack Obama our next president....

It is not uncommon to have major Wall Street players criticize traditional market timing strategies in the financial media. However, such criticism is somewhat misguided in today's market, when many buy-and-hold investors are suffering major investment losses. That's why I was somewhat surprised to see David Dreman, a known contrarian, tag along with the buy-and-hold crowd in a recent Forbes article. In this week's E-Letter, I'm going to take on Mr. Dreman's recent comments about traditional market timing strategies. I'll also show you his recent performance as compared to that of Scotia Partners, one of our latest market timing managers. You can then decide for yourself which one has had the upper hand in the recent volatile market environment....