Zeev's Turnips Patch-No Politics (ZEEV)

[John Jet]

Zeev,

You phrased it much more humbly, but I essentially agree with your earlier observation that your adept daytrading abilities have simply conferred on you some degree of immunity, which has kept you from donning that protective bear suit. But you must understand that very few people have such a gift of pattern analysis, or whatever it is that so readily lends itself to your discovery of daily price inflection points, so you must be on guard against complacency when it comes to forecasting. That is what I detect when I hear you say that "the 'core' issues have not felt much of the recent tremors."

I am not sure what you regard as core issues. Perhaps you would be good enough to supply a list. But if you are referring to the tried and true names like MO, KO, PG and the like, I would argue that though they may enjoy some "flight to safety" status from our erstwhile tech favorites, they can no longer be expected to even keep up with core inflation so long as oil prices stubbornly refuse to be tamed. And if these "core issues" can not be expected to accomplish that, there will be no fundamental justification for owning them. It's simply not enough to say "at least it did not go down 30%" as has happened to many techs just over the last 2 months.

Look at a LT chart of MO, for example, http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=mo&sid=0&o_symb=mo&freq=... and ask yourself whether even a 4.9% annual yield will be sufficient to propel the stock much higher if inflation really starts to raise its ugly head. Could it possibly be that MO is actually in the early throes of the deadly triple top?

My message is simply this: the longer oil prices stay up at these levels, the more certain it is that inflation will lead to at best lackluster equity markets, but scintillating commodities markets.

J.J.