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This year’s slump: More like 1929 or 1919?

Source: http://feeds.feedburner.com/~r/ContrarianProfits/~3/443611179/7942
Posted on Wednesday, November 5th, 2008 | In Market Commentary
Contributed by: Contrarian Profits (http://contrarianprofits.com) -

HIDDEN VALUE


Dear Friend,

Last night, America voted to put junior Illinois Senator Barack Obama in the White House.

“Change has come to America,” said Obama in last night’s victory speech.

He wants to restore patriotism and rebuild America, “calloused hand by calloused hand.”

According to Bloomberg, “Obama inherits the toughest environment for a new president since Franklin D. Roosevelt.”
We don’t doubt it.

The 47-year-old faces a cracked financial system, an economic recession, a raging bear market in stocks and a trillion dollar budget deficit… for starters.

The economy is bigger than the president, says Andrew Gordon in Investor’s Daily Edge. And it is heading “irresistibly down”.

Nowhere is that more apparent than in the labor market.

The economy shed 157,000 non-farming jobs in October. And economists expect a similar rate of job losses in the coming months as the recession deepens.

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Despite the economic woes, Taipan Publishing’s Sara Nunnally says investors have a great chance for profits if the Obama administration, as promised, embraces alternative energy.

Wind power accounts for less than 1.5% of America’s energy needs. That leaves scope for huge growth in the sector.

Sara says quality European companies such as Spanish turbine-producer Acciona SA (MCE:ANA) are well positioned to gain from this new initiative.

But emerging markets expert Irwin Greenstein warns the “Obama effect” on clean energy may be short lived.

He says cheaper fossil fuels could weaken the political will for expensive energy reform. Environmental concerns over new wind and solar farms are another major obstacle.

Andrew Snyder says savvy investors could instead make solid gains on the back of the government’s $700bn bailout plan.
 
General Electric (NYSE:GE) doesn’t need a cash injection to survive. But it could use a “shot in the arm” to revitalise growth. This should give the stock a boost and set the firm up for larger profits down the road.

Finally, Taipan Daily editor Justice Litle says all the ‘Great Depression’ comparisons with today may be wildly off the mark.

In 1919, stocks were in a slump, commodity prices had tumbled and a major bank needed a state bailout.

Justice says investors should keep in mind this mix triggered, not a bust, but the “roaring twenties.”

Kind Regards,

Will Bonner,

Publisher,
Hidden Value


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ContrarianProfits.com is a financial news and opinion website with a twist. As investment guru Rick Rule puts it, “You are either a contrarian or a victim.” In the financial world, most people are losers because they just don’t know what game they’re playing. They think they can just get “into the market” along with everyone else, do what everyone else does, and they will make money. Not likely. By the time you’ve paid commissions, spreads, fees, taxes – and suffered the consequences of inflation – you’ll be very lucky just to have as much money as you started with.

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