The Days of “Buy and Hold” Are Over, says John Mauldin

The economy is still the pits yet stocks are on a tear. What’s an investor to do in these confusing times?John Mauldin, president of Millennium Wave Advisors, admits the average investor doesn’t “have as many good choices” as in the past.Contrary to what “experts” have told the public for years, now is not the time for buy and hold, Mauldin says. “You can be a trader. You can ride the wave, I’ve got no problem with that but I don’t think you want to buy something and hold it for five years.”That’s because he thinks another correction is coming in the not so distant future.Mauldin, who writes the Thoughts from the Frontline e-letter, does think there’s money to be made in real estate. With prices so depressed in many markets, he says buying property on the cheap and renting it “is a prescription for making money.”

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John Mauldin Tax Hikes Will Kill the Recovery Which Isn’t Real Anyway

The economic recovery currently underway is a statistical mirage, based on easy year-over-year comparisons and inventory rebuilding, John Mauldin, president of Millennium Wave Securities, tells Henry in the accompanying video.The unemployment rate is closer to 12% when you include people who’ve been dropped from the survey and the “underemployment” rate – people working part-time vs. full time – is 17% to 18%, “and rising,” Mauldin says. “That doesn’t feel like recovery.”Mauldin, who writes the popular Thoughts from the Frontline e-letter, predicts the U.S. economy will be back in recession next year because of higher taxes, both new and with the expiration of the Bush tax cuts.”The Obama administration [and] the Democrats aren’t going to be able to help themselves,” he says. “The deficits are going to be running so high they’ll feel – politically — the need to do something. The way they want to solve it — instead of cutting spending is to increase the revenue. That’s going to suck a lot of air out of the room.”As for the long-term, Mauldin worries America could repeat Japan’s experience of a lost decade (or two), if not the Great Depression itself, citing the risk of policy errors such as trying to solve a debt crisis by issuing more debt.

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Robert Shiller, Market Boom “Can’t Be Trusted”

The strength of the recovery in the housing market has surprised a lot of people, including Yale Professor Robert Shiller.”This is historic,” Shiller says of the recent snapback in the Case-Shiller Index. “It’s V-shaped. We’ve never seen it before. That makes it hard to know from statistical basis what it portends.”Are we on track for a repeat of irrational exuberance?With the stock market up more than 50% since March and the Standard & Poor’s Case/Shiller Index on the rise for the last three months, it’s a worry, says Yale Professor Robert Shiller. “Somehow we got into this really speculative mentality and I don’t think we’re out of it yet.”

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Elizabeth Warren says, Housing Market Getting Worse

Home Foreclosures Will Last For Years

10 to 12 million U.S. Homes Could Ultimately Go Into Foreclosure

There’s been a lot of talk lately about a recovery in the housing market – even reports of bubbles re-inflating in certain markets. Elizabeth Warren, chair of the Congressional Oversight Panel, isn’t buying it. “We see things getting worse in the housing market,” Warren says, citing the pernicious effects of foreclosures, which rose 5% in the third quarter to a total of 937,840, according to RealtyTrac. “The long-term impact of high foreclosure rates on our housing market and overall economy would be disastrous,” Warren warns, citing estimates that 10 to 12 million U.S. homes could ultimately go into foreclosure. “We have to get foreclosures under control. “Why the sense of urgency?

A single foreclosure property brings prices down an average of $5000 for every house in a two-block radius and costs investors an average of $120,000, she says. In its most recent report, Warren’s panel criticized the Treasury’s foreclosure modification efforts as “inadequate” and “targeted at the housing crisis as it existed six months ago, rather than as it exits right now. “Specifically, the Treasury program is targeted at subprime borrowers hit with ballooning mortgage payments vs. prime borrowers hit by job losses.  As for the “morality question” of whether the government should be bailing out homeowners, Warren says “I’m passed that,” noting “there’s plenty of unfairness to go around.”More importantly, “ultimately the American taxpayer — thanks to Fannie, Freddie and FHA — is going to stand behind many of these mortgage,” she says. “We need to be thinking more globally what is cheapest possible way to bring this crisis to an end. “One solution: Force investors holders these mortgages who may be betting on a government bailout to take a haircut, as occurred with GM and Chrysler creditors. “That’s why they call it investing,” Warren says. “You make profits in good times, take losses in bad times. That’s the fundamental part of this [modification effort] that’s missing.”

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Jim Rogers Says, Gold Will Hit $2,000 and USA Will Lose Status As The World’s Reserve Currency

Good Time To Buy Gold

Good Time To Buy Gold

Famed investor Jim Rogers is “quite sure gold will go over $2000 per ounce during this bull market.”Rogers’ confidence gold will continue to rally stems from a view the U.S. dollar is on its way to losing status as the world’s reserve currency.”Is it going to happen? Yes,” Rogers says. “I don’t like saying it [and] I’m extremely worried about it but we have to deal with the facts. America is not getting better [and] the dollar is going to be replaced just like pound sterling [was].”Rogers didn’t offer a timetable, and it’s likely gold would exceed $2000 per ounce if the dollar were to lose its reserve status.Still, “I wouldn’t buy gold today,” Rogers says. “I think I’ll make more money in other commodities, which are cheaper,” as discussed in more detail here.Among many others, Rogers is “worried about the fact the U.S. government is printing huge amounts, spending gigantic amounts of money it doesn’t have,” the investor and author says. “People are very worried [and] skeptical about paper money [and] looking for places to protect themselves. The best way is to buy real assets. [That] has always protected one during currency turmoil, and it will again.”

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Jim Rogers Says, Inflation Inevitable – Could Be Much Worse Than the 1970’s

Given the Fed’s extremely easy policies, runaway government spending and shortages of many commodities, inflation pressures are building and destined to get much worse, according to famed investor Jim Rogers of Rogers Holdings.”The Federal Reserve has laid the groundwork for some serious inflation down the road by printing all this money,” Rogers says. “So have many other central banks.”Although “the U.S. government lies about inflation” in its official data, inflationary pressures are already evident in nearly everything, excluding energy, Rogers says. Inflation is “going to continue, going to accelerate,” he says. “We’re going to be paying more for just about everything down the road.”Asked if he foresees a 1970s-style stagflation period ahead, Rogers chuckled and gave an ominous reply: “I hope it’s that good. It might be much, much worse.”Given that view, Rogers remains very bullish on commodities as we discuss in subsequent clips.

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Jim Rogers Says, Commodities Cycle Won’t Be Over for Years and Food Crisis Looms

Jim Rogers, famed investor and best-selling author, announced the start of a global commodities rally in 1999. It turned out to be a heck of call: Since then, commodities have dramatically outperformed stocks. Just this year, gold has hit record highs above $1000 per ounce, copper has nearly doubled and oil has rallied sharply off its March lows. So does Robers still believe in the commodity boom?You bet. “The story is not over, not for a while,” he tells Tech Ticker in this video clip. “I don’t see any reason it’s going to be over for a few years because no one is bringing new supply on stream.”The chairman of Rogers Holdings still owns gold though it’s not his favorite metal. “Gold is mystical to many people. I think I’ll make money in other commodities that are more useful.”Rogers is far more bullish on agricultural commodities. As he sees it, “most agricultural products are still depressed on a historic basis.”The lack of supply Rogers sees is especially concerning when it comes to agricultural products. “A catastrophe is looming,” he says. “The world is going to have a period when we cannot get food at any price in some parts of the world.”A potential food crisis transcends money, but Rogers warning may still prove to be another great investment lesson. As he told us in parting, “instead of getting an MBA, get yourself a farming degree. You’ll make a lot more money.”

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