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You Wont Like This
Why? Because I am going to shatter your conventional wisdom as I have many times in previous columns about the lies that Wall Street continues to tell you. This time we are going to go deeper into the economy to unearth the truth about lies the politicians are telling you.
Let's understand from the beginning that few politicians understand basic economics. Just because they work in Washington does not make them experts about the laws that have been passed or those they vote upon. Politicians do not create jobs or wealth. Don't feel you are the only one who can't make head or tail out of government statistics.
The most misunderstood debate today is about OUTSOURCING. ? sending our jobs overseas. From March of 2001 to January of 2004 manufacturing jobs declined by 2.6 million ? a loss of 17%. BUT during that same period there was an increase of 17% in worker productivity and only a loss of 3% in jobs. More goods produced with fewer workers. Those jobs did not go overseas ? only 300,000 did. The majority were lost to better machines and will never reappear. If employment efficiency had not increased we would have even higher unemployment today.
That is why unions hate new machines. Loss of jobs. If a company wants to remain competitive they must be able to produce at the least cost or you won't have a job. Do you think you would have your job today if your company continued to operate they way they did 5 years ago? Employment continues to increase every quarter even though we lose about 7% or 8% of U.S. jobs every quarter.
Has anyone told you that thousands of foreign companies have opened plants in the U.S? We don't hear about the small ones only the BMWs, Toyotas and Hondas. According to Peter Drucker, management consultant, we import more jobs than we export. Jobs increased by millions after NAFTA and because of NAFTA.
Will these layoffs continue? It depends upon your industry sector. According to the Bureau of Labor Statistics there were more mass layoffs (50 or more) during this January than any previous January in history - 239,454 ? 1/3rd of those are in manufacturing.
The U.S. is still not producing enough new jobs to keep us even; that requires more than 150,000 new hires each month.
Political demagoguery blames everyone and anyone who is in office. Whoever the president is is the one to blame ? rightly or wrongly. Every industrialized country today has a problem with excess production capacity and is doing weird things to keep their workers on the production line. We are not the only ones with job losses. That does not make the guy in the unemployment line feel any better.
It is our productivity edge that has kept as many jobs as we have now or it would be a lot worse. Free trade is the answer and not tariffs on other country's goods. As I have written before tariffs are hidden taxes on the consumer and benefit no one. They have NEVER worked in all of history and make more problems than they solve.
Don't listen to the political rhetoric. You may not like what I have said, but maybe it will start you thinking.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Question: How does it get better when it gets worse?
The Right Mutual Funds For Baby Boomers
If you are a baby boomer, time is not on your side. Many baby boomers see retirement age fast approaching with little to nothing in the way of retirement assets that will allow them to actually retire and live a comfortable lifestyle.
Its A Duck
If it walks like a duck, quacks like a duck and looks like a duck it must be a duck.
No, this is not a symbol for some Latin number. The Wall Street mavens talk about this market timing device as if they knew how to use it to determine which way the stock market is going ? up or down. It is pretty obvious that brokers, analysts and financial planners have not learned the language.
Hill of Hope
Just about now everyone is confused as to which way the stock market is going to go - up or down. For the past 3 years it has been headed south, but the Wall Street experts have told us that the market never goes down 4 years in a row so this has to be an up year. But no guarantees.
Race Horses and Mutual Funds
For years investors have been taught to look into the composition of a mutual funds. In other words the "experts" want you to take the time to analyze the stocks within the mutual fund portfolio, categorize them by industry group and try to understand the objective of the fund manager. This is nonsense.
The Importance of Using Stop Loss Orders When Spread Trading the Financial Markets
A Guide to Using Stop Loss Orders
How to Pick Winning Stocks
There is nothing more exciting than finding an undervalued stock and seeing it explode out of nowhere rising in value 100% or more in a few weeks. Some stocks can move as much as 1000% in a year and?. Even after the stock market crashed in 2000, some stocks still have gone up 500% or more in a year.
Laws and Efficiencies and Theories of Diminishing Returns
The basis of diminishing return discussions surround such simple notions; that when you have a very fast aircraft, you also have coefficients of drag issues. When you are building a quarter mile car and want to go faster you must realize that for every tenth of a second you need to lose 100 lbs., but to go faster you also need more power, thus the problem in Einstein's theory of the threshold of speed being that of the speed of light. In aviation there is a hyperbolic curve with coefficients of drag that makes aircraft design nearly obsolete when dealing within the boundaries of the atmosphere with the relationships of time, speed and distance equations.
Stock Market Investing: Knowing When (and when not) to Sell
One of the greatest challenges of investing in stocks is developing a "sell discipline". Some of the most adept investors struggle with the decision of when to sell.
Buy and Hold: How to Perpetuate Your Investment Losses
A recent cartoon in my daily newspaper showed two guys sitting in a bar. One is saying to the other: "I did learn something from my broker...how to diversify my investment losses."
There is no question that the stock market is being affected by war jitters. When it looks like peace we have a strong rally. When it looks like shooting will begin momentarily the market takes a dump. What should you do with your stock, mutual funds or cash that is waiting to find a home?
10 Tips For Creating Wealth From the Stock Market
1. Do not spread your money too thin.
If you have a pension plan at work you will want to read this and if you don't you will still want to because it affects your retirement account.
The Three Little Pigs Went to the Stock Market
Three little pigs went to the market to stock up for the future.
As the man said, "I've got some good news and I've got some bad news. What do you want to hear first?" It was replied, "Tell me the good news first". The good news is that they are going to make some changes in the mutual fund industry reporting to help the investor and the bad news is it isn't going to make any difference in your bottom line.
Learn to Calculate a Stock?s Pivot Point
Stocks breakout from properly formed bases everyday but many investors don't understand how to locate a pivot point or what patterns to study that may contain this very important buy signal. A pivot point can be described as the optimal buy point or the area at the end of a familiar base pattern where the stock breaks out into new high territory. William O'Neil, the founder of Investor's Business Daily is considered the pioneer of the pivot point in modern times. As Jesse Livermore explains in his book (1941), the pivot point can also be described as the point of least resistance. When a stock breaks the point of least resistance, we are presented with an opportunity where a stock has the greatest chance of moving higher in a short period of time, especially when volume accompanies the breakout.
I love roller coasters. The steeper the better. High and fast and curvy. Yahoo! Let's go again. But to get to the drop off point you have a slow grind up.
Trapeze Artist - Swinging with the Stock Market
When we go to the circus we see a trapeze artist working on a high wire or swing either alone or with other athletes. They know what they are doing because of constant practice, but every once in a while there can be a mistake, even a small one that can cause one of them to fall. The result is death or serious injury when they hit the ground.
What Our Investment Advisor Wont Say Off The Bat
Most advisors will tell you they can beat the market. They may even point to years in which they did. But now you will learn the little known fact that is seldom mentioned outside the financial world. It is very, very, VERY DIFFICULT TO BEAT THE MARKET.
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