How,Predictions,Came,True,the, finance, share, loan How My Predictions Came True


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At the beginning of the year, I wrote in this column about what we can expect in 2009. Some of the predictions are starting to come together and I think they bode well for a recovery in the stock market.Here's what I wrote: "I've written a lot about the coming inflation problem and the fact that gold should do very well over the next several years. If you haven't noticed already, the spot price of gold has been ticking higher. Once it breaks $900.00 an ounce, $1,000 is a cakewalk."Well, gold did break through the $900.00 level and quite easily. In a quiet, almost stealthy manner, gold proceeded to appreciate to the $1,000-per-ounce level, and has since pulled back. Recent news on the inflation front has been telling. Consumer prices rose 0.4% in February and, even outstripping the volatile food and energy component, core inflation in February came in at 0.2%, double what economists expected. In a recession, this to me is strong price inflation. It only reinforces my view that investors must have some exposure to gold over the next few years, because inflation is going to be the big problem we face.I also wrote: "2009 is going to be a trader's market. In fact, it could be a trader's dream market. Big stock market swings are the new norm in the equity speculation business and there is a lot of opportunity out there to play both sides of the market. Currencies are going to be volatile as governments try to deal with the global recession. Commodities are going to be volatile because they always are. Chinese stocks could very well recover big time in 2009."We are now getting big swings in the main stock market indices, because there is so much money sitting on the sidelines. The current bear market rally has some real legs, because investors have been waiting for a reason to act. Investors have been waiting for a trend to follow up on.I have to say that my China prediction is so far intact. The Chinese stock market was in a bubble and already corrected before the global recession hit. Even though economic growth in the world's third largest economy is slowing, the stock market will lead the recovery. As I say, that stock market has already corrected and it is now thinking about a new uptrend. One of the best ways that investors can play the recovery in Chinese stocks is to consider a mutual fund or an ETF like iShares. Along with some exposure to gold, investors must have some exposure to domestic Chinese equities if they want to outperform over the coming quarters. Finally, I wrote the following about the domestic marketplace: "There are all kinds of companies out there right now available at fire sale prices. If you've got a big wallet, the best opportunities now are buying entire businesses outright. The mergers and acquisitions (M&A) business will be booming later in 2009. How can it not? Sun Microsystems (NASDAQ/JAVA) is trading on a per share basis for about the same amount of cash it has in the bank. Technology M&A should be hot over the coming quarters."Sun Microsystems' stock price recently soared on news that IBM was in discussions with the company to purchase it outright.All that the marketplace needed was a little confidence booster (like news that some big banks are now operating profitably). Now the big companies are stepping up to the plate and rightly so; there are all kinds of great buys out there. M&A will be getting hotter as the year progresses.Profit Confidential---http://www.profitconfidential.com/LOMBARDI PUBLISHING CORPORATIONNews, Analysis, and Information Services Since 1986.One Million Customers in 141 Countries.Lombardi Publishing CorporationFinancial Publications Division350 Fifth Avenue, Suite 3304New York, NY 10118-3304---Copyright 2008; Lombardi Publishing Corporation. All rights reserved. No part of this e-newsletter may be used or reproduced in any manner or means, including print, electronic, mechanical, or by any information storage and retrieval system whatsoever, without written permission from the copyright holder. Article Tags: Some Exposure, Stock Market

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