The November edition of Donald Coxe’s Basic Points research report (subtitled “The Power of Zero”) has just been published. His investment recommendations, as summarized in this document, are listed in the paragraphs below, but I do recommend you also read the full report at the bottom of the post. (Also note that Donald’s weekly webcasts can be accessed from the sidebar of the Investment Postcards site.)

1. Remain underweighted in US equities-as a percentage of total equities within global portfolios, and as a percentage of assets in US balanced portfolios. Underweight US bonds in global portfolios.

The Obama long-term financial projections for the US are high risk and unsustainable. Forthcoming elections-or a currency crisis-could induce some discipline, but within the OECD, the US should probably no longer be accorded top ranking for bonds and stocks.

2. Within the US market, underweight US economy-related

The September edition of Donald Coxe’s Basic Points research report (subtitled “Dem Blues”) has just been published. His investment recommendations, as summarized in this document, are listed in the paragraphs below, but I do recommend you also read the full report at the bottom of the post. (Also note that Donald’s weekly webcasts can be accessed from the sidebar of the Investment Postcards site.)

1. Upgrade equity portfolios to reduce endogenous risk. Trade upward in quality, and, in balanced accounts, increase bond exposure. There is, at present, too much froth for comfort. After the grandest recession /recovery stock market rally on record, this is hardly a good time to commit new money into equities.

2. Emphasize Canadian stocks in North American portfolios. Canada has the best banks, and the best range of commodity-oriented stocks. And it has the best North American currency.

3. Continue to overweight commodity-oriented

Gold managed to add about three bucks to its price from the beginning of Wednesday morning trading in the Far East…right up until 1:00 p.m. in the London afternoon…which was 8:00 a.m. in New York. At that point, gold tacked on $8 in less than 30 minutes…sat there until lunchtime…then tacked on another $8 in less than 15 minutes. Then one of the usual not-for-profit sellers showed up and that was it for the day. Gold did manage to poke its nose above $940 again…and finally closed above the $940 mark at $940.30.

Does this price have any significance? Who knows, but I can easily tell that ‘da boyz’ have been defending this price with great enthusiasm since June 15th…as the daily market action has been so obvious lately…confirmed by the graph below.

Silver didn’t show up for this party, but

“Words from the Wise” this week comes to you in a shortened format as I do not have access to my normal research resources while on the road in Europe (also see my post “Gone A.W.O.L. - to Slovenia and Switzerland“). Although very little commentary is provided, a full dose of excerpts from interesting news items and quotes from market commentators is included.

While investors’ hopes of an economic recovery might have got ahead of reality, the cartoonists continually reminded us of worrisome issues …

Source: Signe Wilkinson, Washington Post,  June 18, 2009.

The past week’s performance of the major asset classes is summarized by the chart below - a mixed bag so to speak.

Source: StockCharts.com

A summary of

The June edition of Donald Coxe’s Basic Points research report (subtitled “Who Will Really Lead the Global Rescue?”) has just been published. His investment recommendations, as summarized in this document, are listed in the paragraphs below, but I do recommend you also read the full report at the bottom of the post. (Also note that Donald’s weekly webcasts can be accessed from the sidebar of the Investment Postcards site.)

1. The current US equity rally shows signs of needing a summer rest. But it will not fall back into the Slough of Despond. This is a cyclical bull market within a structural bear market – until proven otherwise. What it most needs now is a lift from the bank stocks – and from sharply rising volume on days the market rises sharply, and from falling volume when it falls. It has been getting none of the above.

A long-awaited reversal in the monumental global stock market rally since early March finally arrived last week. As the first-quarter earnings season started winding down and post stress-test capital-raising weighed on some banks, investors were faced with a slew of gloomy economic reports suggesting the recent optimism about a global recovery might have been premature.

“This week, the hard economic data remind us that the global recession is ongoing: exports remain deep in the red; retail sales disappoint; inflation still volatile on food and energy but down on year; and industrial production declines. However, the data are consistent with the story of a slowing economic decline, foretold by several ‘green shoot’ survey reports,” said Rebecca Wilder (News N Economics).

Source: Tom Toles, Washington Post.

“Less bad” economic reports provided investors with little comfort, sparking a reassessment

One of the definitions of “stress” offered by the Merriam-Webster dictionary is “bodily or mental tension resulting from factors that tend to alter an existent equilibrium”. Well, any bodily or mental tension investors might have been suffering from as a result of financial factors were shrugged off on Thursday with the announcement by US regulators that ten of the nation’s largest banks had to add a total of “only” $74.6 billion in equity following the completion of stress tests. However, whether this will indeed restore the equilibrium remains to be seen.

Source: Walt Handelsman

The diagram below, courtesy of the Financial Times, summarizes the stress test results in a nutshell. Click here or on the image below for a larger graphic.

Source: Financial Times

As investors welcomed the

“Goodbye safe havens, hello risky assets.” This was the refrain of investors’ theme song during the past week. Safe-haven assets were out of favor as better-than-feared corporate earnings and signs of a budding economic recovery emboldened investors’ appetite for reflation trades such as equities and commodities.

Investors’ sentiment improved notwithstanding a number of influences that could potentially disturb financial markets. These included a three-day delay in the release of the stress test results of the 19 biggest US banks until May 7, the plight of the beleaguered US automakers with General Motors (GM) proposing a sweeping debt-for-equity restructuring and Chrysler filing for Chapter 11 bankruptcy protection, and fears of an escalation in the number of swine flu (H1N1) cases.

Source: Vita

As to be expected given the countless catalysts, the past week’s trading was bumpy, but the major

The April edition of Donald Coxe’s Basic Points research report (subtitled “Where will America go to grow”) has just been published. His investment recommendations, as summarized in this document, are listed in the paragraphs below, but I do recommend you also read the full report at the bottom of the post. (Also note that Donald’s weekly webcasts can be accessed from the sidebar of the Investment Postcards site.)

1. F. Scott Fitzgerald had it wrong, at least for American stocks: you do get a second, and even a third chance. Stocks leading that six-week rally looked down, couldn’t see the bottom anymore, and promptly retreated to lower levels. Think about what you’ll most want to own when The Real Thing arrives, and accumulate them at leisure, while the market tries to decide whether the economic recovery is a month, a quarter, or

“Words from the Wise” this week comes to you in a shortened format as my traveling in the US precludes me from doing my customary commentary. However, a full dose of excerpts from interesting news items and quotes from market commentators is provided.

On Friday, Federal Reserve regulators have released a white paper outlining the criteria they used to assess the financial health of the nation’s 19 biggest banks. On the same day they also briefed the banks about how their companies had fared in the examination. The banks will have until Tuesday to dispute any of the results before they are made public on May 4.

According to the Financial Times, senior Fed officials said US authorities will ask some of the country’s biggest banks to raise more capital following the completion of bank stress tests. The officials also indicated