Tuesday Oct 24, 2006

Historic perspectives

Taipan Group's Dynamic Market Alert

-- Historic perspectives
-- Clowns & Harlots:Out of Africa
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Historic perspectives

by J. Christoph Amberger

Another day, another record for the Dow. And not just any new record. If anything, yesterday's gain of almost 1% gave an idea of just what kind of potential remains dormant in this index... despite the fact that we now can diagnose an almost three-year-old bull market.

To gain perspective, on the strength and direction of current trends, it is useful to every now and then look away from the day-to-day charts and select a longer time period. Going back 30 years on gold puts the recent (and in my opinion, now-deceased) bull run into historic perspective, even if you don't bother to adjust for inflation.

So does even a five- or even six-year chart of the Dow Jones industrials. We're now closing in on an inflation-adjusted repeat of the last historic high. We're closer to 13,000 now than we are to 10,000 -- as I pointed out in our “Weekly Edition” video talk shows at TaipanFinancialNews.com.

(As a reader of Dynamic Market Alert, you have free and unlimited access to almost everything we feature on that site!)

This year represents a statistical aberration in that months that historically have left a bad taste for stock investors have seen an upward surge in stock valuations that is unprecedented.

I think this is great news for blue-chip investors: While we are certain to see a number of smaller drawbacks, I believe 2006 will be one of the best years for stocks in recent memory.

Even better, 2007 will see an even greater boom.

Clowns & Harlots: Out of Africa

by Christopher Corbett

The American press -- that includes television and other broadcast media -- is legendary for the paucity of foreign news it reports.   In many of the more benighted backwaters they are actually proud of this.  Vast numbers of my fellow Americanos cannot name the prime minister of Great Britain.  Even larger numbers could not name the prime minister of France.  When you get much more than 100 miles from either coast, many citizens could not find Portugal much less the Sudan on a map.

Given the insularity of this country, the news out of Africa is rare.  Most of it is cartoonishly cruel.  So naturally I was interested that last week the most heavily reported story off that troubled continent was about the rock star Madonna’s visit to remote Malawi and how she went about bringing home a little souvenir of her trip -- a one-year-old Malawian orphan she has decided to call David.  Don’t they still sell tribal masks?  This freakish tale is easily the most heavily reported story out of Africa in months, perhaps years.  I had nearly 2,000 Google hits on it.

Madonna makes good copy.  Now human rights organizations have entered the fray to demand that the child be returned.  The argument appears to be that Madonna received special treatment in adopting the foundling!  No kidding!  (Strange, rich white woman with vast retinue of sycophants drops out of sky into impoverished African nation promising vast sums.  Local potentates smell moolah and allow her to take home orphan.)  This was the sort of thing Evelyn Waugh wrote comic novels about.

One would think that human rights organizations in Africa might have a great deal more to do than worry about one child on a continent devastated by AIDS and civil wars.  What about Darfur?  But then Madonna makes good copy.  And she is a natural mom if ever God made one.  Here this snippet from the British press demonstrating her maternal instincts last week:

While Madonna attended the gym on Wednesday, she sent an assistant to buy clothes for David and demanded video footage be sent to her mobile phone so she could approve the outfits.

Sounds maternal to me.  Look, I don’t know whether or not a rich dilettante should be able to obtain a live souvenir in Africa.  The ethical issues are interesting.  (It would probably be more difficult to obtain a lion cub and that ought to give pause, too.)  The wires as I am writing this say that other stars -- Britney Spears for one -- are thinking that a little child from Africa might be a fine idea.  Kind of like a lawn ornament?  A living conversation piece?  I just don’t know about this idea of celebrities going on safari for orphans.  I know that Malawi is a poor country and I know that Africa is famously corrupt.  (I suggest you read Paul Theroux’s brilliant Dark Star Safari if you doubt this.)

Truth be told, the custom of wealthy and powerful people bringing home living curiosities from exotic places is an old one.  As recently as the 19th century, it would have been possible in many large American cities to pay to see Eskimos (as they were then called), pygmies or “Chinamen” in freak shows.  Chicanerous ship’s captains were famous for shanghaiing unfortunates in the wilds of Borneo or some other exotic spot and bringing them back to Europe or the United States for their “entertainment value.”  That’s show biz.  The great impresario P.T. Barnum did a roaring trade in exhibiting “wild men” and dwarves and the retarded.  Mr. Barnum was always ahead of his time and he knew what the public wanted.  Imagine if the old showman had lived to see reality television?

I do not think it much of a risk to hazard that most Americans had never heard of Malawi until the Material Girl decided to help ease the suffering there.  Most Americans had no idea where Malawi was or even what it was.  Madonna has put Malawi on the map -- or at least on Letterman and Leno and The Daily Show.  Now it is the punch line to a joke.  One of my favorite moments in this grotesque affair was the Malawian press describing Madonna as “a nice Christian lady.”

But the most interesting thing about this weird, vulgar sideshow was that the British newspapers said that the child’s father -- he’d given the baby up for adoption so technically the lad was no orphan -- had never heard of Madonna. Never heard of Madonna?  Zounds!

Hope does indeed spring eternal.  Imagine a world where there is still a place where the citizens have not heard of Madonna?  Malawi can’t be all bad.

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Earnings Announcements

Aaron Rents Inc, Abitibi-Consolidated, Active Power Inc, Actuate Corporation, Aldila Inc, Anheuser-Busch Companies Inc, Applebee’s International, Arctic Cat Inc, Arrow Electronics Inc, Banner Corporation, Bemis Company, Cache Inc, Cirrus Logic, Deltic Timber, Elan Corporation, F5 Networks, Forrester Research, Furniture Brands, Graco, Granite Construction, Harrah’s Entertainment, Honda Motor Company Ltd, LSI Logic, MIPS Technologies, Owens Corning, PDF Solutions, Pulte Homes Inc, Rollins Inc, Sharp, Tandy Brands, United Surgical Partners International Inc, Waste Management, Weyerhauser Company, Wright Medical Group Inc, Yankee Candle, and Zimmer Holdings Inc are releasing earnings.

Brought to you by http://www.AmericanCapitalist.net

Unlock Dates for October 2006

10/23/06 – Corel Corporation is unlocking 6.5 million shares.
10/31/06 – Delek US Holdings is unlocking 10 million shares.

Brought to you by http://www.gressor.com

Upgrades and Downgrades

Anheuser-Busch (a put option position in EVS) downgraded by UBS from Neutral to Reduce.

Broadwing downgraded by Jefferies & Company from Buy to Hold.

Electronic Arts downgraded by Kaufman Bros from Buy to Hold.

Knight Transportation downgraded by Wachovia from Outperform to Market Perform.

Pfizer downgraded by UBS from Buy to Neutral.

Sherwin-Williams downgraded by Matrix Research from Strong Buy to
Buy.

Arch Coal upgraded by Morgan Stanley from Equal Weight to Overweight.

Ford Motor upgraded by Goldman Sachs from Sell to Neutral.

Brought to you by http://www.vixtrader.com

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Quote of the Day:

“If something is known for running, shouldn't it be referred to as French?”

- Darby Conley,  Oct. 24, 2006

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