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Thursday, October 7, 2010

The Boy Who Cried Wolf

In the Boy Who Cried Wolf, a boy yells for help over and over again, until he loses his credibility. Then when he truly needs help, no one listens to his cries.


Well, sometimes I feel like on this blog I may have fallen into the same trap. While I haven't deliberately lied on this blog, the message the stock market is not to be trusted for long term investing due to fraud and a downright horrible economy may have gotten lost over time.

The market bounce from the low in March 2009 was expected, but the duration of how long this has lasted is way beyond what I ever expected. Just because my expected timing is off, doesn't mean the fundamentals are wrong. I have learned quite a bit in the last 4 years, and one key item is not to try to time the market.

I wanted to reiterate this message today. The stock market cannot be trusted. The financial foundation is based upon fraudulent accounting rules enacted as an emergency measure back in 2008. Here it is after supposedly the economy has ended a recession, the fraudulent accounting remains.

Bogus accounting aside, the fundamentals will be reflected eventually. If you must be long the markets, I still like natural resource based stocks. However, at this point many natural resources are getting over-extended.

Good luck to all of you, and stay nimble.


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