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Don made it back to civilization from Aruba, but unfortunately brought the flu bug with him. In spite of this, the briefing was updated today and can be found in The Briefing Room.
Iran is probably getting closer to affecting our stock market. The Iranian elections were in the headlines regularly. We were trying to get Ahmadiniwhatever to the nuclear bargaining table by implementing sanctions on their country. These sanctions, in turn, caused huge stress to their economy during elections. We just spoke a few weeks ago how elections go when the economy is under stress -- the incumbent gets de-throned.
The unintended consequences of our actions is the true hardliners (Khameini and his gang) have gotten back into power. They won over 75% of the parliament seats making Ahmadinijab a lame duck. It will be interesting to see what happens now. We thought Ahmadimidribble was bad!
My favorite analyst, John Mauldin wrote this week: "For every government law hurriedly passed in response to a current or recent crisis, there will be two or more unintended consequences, which will have equal or greater negative effects than the problem it was designed to fix." He goes on; "A further corollary is that laws passed to appease a particular group, whether voters or a particular industry, will have at least three unintended consequences, most of hwich will eventually have the opposite effect than the intended outcomes and transfer costs to innocent bystanders."
John was referring mostly to the european mess and the "solutions" they are implementing, including the trillion euros the European Central Bank just printed (created). In the last 6 months the ECB has nearly quadrupled their money supply. His conclusion is that these antics will lead to the european break up rather than fixing their problems. Time will tell but in the meantime volatility will probably pick up.
We have been hanging along the sidelines as the market has pretty much gone sideways, patiently waiting for a meaningful pullback exposing a new wholesale entry. Today's over 1.5% pullback gave us such an opportunity to begin some new positions. Please visit the briefing for all the details.
Have a great day!!
John Norquay CEO PivotPoint Advisors |
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Tuesday, March 6, 2012
Unintended Consequences
Moderately Aggressive Model
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