Sunday, March 29, 2015 10:19pm
North Adams, MA now: 27 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: Better Days Ahead
By: Bill Schmick On: 06:38AM / Saturday June 25, 2011
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

After this week you should have either an upset stomach, stress headache or both. Human beings do not do well in markets that climb up and down by over a percent on a daily basis. Unfortunately, as this market bottoms, we may expect more of the same.

On the plus side, the Greek Prime Minister George Papandreou received a parliamentary vote of confidence this week. Yet, facing investors this week is a vote on the passage of the austerity plan that the European Community demands in exchange for bailout money.

Economic data continues to disappoint with the latest unemployment figures coming in more than expected. Wherever you look, gloom and doom pervades the minds and hearts of investors. On Wednesday, Fed chief Ben Bernanke didn't help by reducing the Fed's estimate for GDP growth in the second quarter from 3.1-3.3 percent to 2.7-2.9 percent. Even a 5 percent decline in oil was viewed as negative and simply another proof that the economy is faltering.

Most investors missed the point of Thursday's release of 60 million barrels of crude from the world's strategic oil supply. Pundits complained that it was too little to impact demand since it amounted to less than a day's supply of global demand. Others argued it was an act of desperation by an administration that has run out of ideas to stimulate the economy.

It was none of the above, in my opinion. Readers may recall that a few weeks ago prices of most commodities peaked after the CME raised margin requirements for everything from energy to silver. Speculators, who had bid commodity prices up to astronomical levels, abandoned the market in droves causing prices to decline to their present levels.

Most energy experts believe that the fundamental price where supply and demand for oil are in balance is closer to $85 in barrel. But notice oil, until this week it was still trading at $100 a barrel and above, (although down from its recent peak of $112 a barrel). Clearly, there were still a lot of speculators in the market, who could go either way. It was a tipping point where there was at least a 50/50 chance that traders might try and take the price higher once more.

To me, the International Energy Agency exhibited perfect timing. With a relatively small amount of released oil, they managed to drop the price of crude by $5 a barrel and send the speculators running for the hills. It has also added another element of risk since nervous traders will now have to be looking over their shoulder in case the IEA does it again.

As for the wall of worries that beset the market, all this pessimism is part of the normal process one expects as the averages descend to a level where buyers once again appear. Today we are probably within 1-2 percent of that area, if we are not already there. To me, the math is simple: a possible 50-point decline in the weeks ahead on the S&P 500 Index versus 150-200 points of upside. The risk/reward ratio tells me to not only hold the course but to buy on weakness.

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at (toll free) or e-mail him at wschmick@fairpoint.net. Visit www.afewdollarsmore.com for more of Bill's insights.



0 Comments
Tags: silver, oil, commodities, Greece      
News Headlines
Williams Women's Tennis Beats No. 1 Emory
Lanesborough School Approves $182K Budget Cut
North County Group Lobbies for Hospital Reopening
Finance Committee, Selectmen See ACRSD Proposed Budget
Former Pittsfield Councilor Pete White Seeking at-Large Seat
Williams College Admits 1,159 Students for Class of 2019
Cheshire Water Protection Bylaws Saved; Bridge Being Closed
Lenox Library Launches 20th Annual Book Donation Drive
Scholarship Deadline Approaching for Girls Inc. Awards
Applications Accepted for Lola Greene Legacy Scholarships

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (164)
Independent Investor (221)
Archives:
March 2015 (6)
March 2014 (1)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
Tags:
Europe Retirement Selloff Commodities Congress Jobs Metals Europe Stimulus Pullback Japan Interest Rates Election Debt Stock Market Stocks Markets Deficit Taxes Debt Ceiling Banks Euro Fed Oil Crisis Housing Recession Fiscal Cliff Energy Rally Currency Economy Bailout Federal Reserve Greece
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
The Independent Investor: How Will Wall Street II Play on Main Street?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
@theMarket: The Fed Does It Again
The Independent Investor: Financial Challenges Facing Single Parents
@theMarket: Pay Attention to Diverging Markets
The Independent Investor: Kids & Money
@theMarket: Home on the Range
The Independent Investor: Rise of the Smoothie
@The Market: Full Steam Ahead
The Independent Investor: New Fiduciary Rule Would Benefit All of Us
The Independent Investor: How to Make the Most Out of Social Security
@theMarket: A Race to the Bottom


View All
Spark Event @ Sohn Gallery
Sohn Fine Art in Lenox hosts a Berkshire Creative Spark...
Hoosac Valley Does 'Grease'
The Hoosac Valley High School drama team is producing the...
North Adams Chamber @River...
The North Adams Chamber of Commerce held its monthly mixer...
Birds of Prey
Julie Anne Collier of
Berkshire Chamber Nite @ UP
The Berkshire Chamber of Commerce held its monthly...
Pitt House Series at Dottie's
The first in the Pitt House Concert Series was a sold out...
Berkshire Awards 2015
Lila Berle, Churchill Cotton and Mary Rentz were honored on...
BYP Networking at AIER
The Berkshire Young Professionals gathered at the American...
Berkshire Art Fellowship Show
The 12 Berkshire Art Association College Fellows for 2015...
Hoosac Boys Lose to Old...
The Bulldogs scored the next six points and later used a...
Hoosac Girls Drop State Final...
The Hoosac Valley girls basketball team ended its season...
Massachusetts Region I High...
Near 80 students from throughout the region met in the...
Mt. Greylock SEE Fund
Williamstown's community access television station,...
2OT, Sends Hoosac to State...
Jameson Coughlan scored on a baseline inbounds play from...
HV Win State Semi-Final
Last season, with 1 min., 30 sec. to go Bellingham was down...
Hoosac Girls to Western Mass...
On Saturday afternoon, it had a chance to hang one more...
Spark Event @ Sohn Gallery
Sohn Fine Art in Lenox hosts a Berkshire Creative Spark...
Hoosac Valley Does 'Grease'
The Hoosac Valley High School drama team is producing the...
North Adams Chamber @River...
The North Adams Chamber of Commerce held its monthly mixer...
Birds of Prey
Julie Anne Collier of
Berkshire Chamber Nite @ UP
The Berkshire Chamber of Commerce held its monthly...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved