Debunking The Paradox of Thrift: Why Consumer Spending Won’t Save Our Economy

by Mark Skousen, Contributing Editor

“America’s saving rate has leaped ahead – and it’s sending America to the poorhouse.” – David Fessler

An Investment U column attacking the virtue of thrift – surely not?

Yet there it was – an article from David Fessler on September 12, entitled, “The Paradox of Thrift: How a Better Savings Rate is Fueling the Recession.”

David Fessler is a friend and smart investment analyst, so I was surprised that he fell for one of the biggest myths in economics today – the so-called “paradox of thrift” that Keynesian economists spout all the time.

Here’s the problem with the theory, plus a few stocks that are front-and-center of the opposite argument…

The Keynesian Way

Let’s start with the facts, as David correctly noted. During the

The One Investment That Pays Dividends Every Day

by Alexander Green, Advisory Panelist

I recently received a prospectus for a new closed-end fund, the Artemundi Global Fund.

This fund does not invest in stocks, bonds, commodities, or currencies. Rather, it invests solely in art, from Old Masters to Post-war and Contemporary Art.

Artemundi points out that fine art has outperformed stocks, bonds and real estate over the past 20 years. It has a low correlation with other assets, providing excellent diversification. And it is portable, so you can take it with you around the country and across borders.

However, I don’t have the slightest interest in owning art through a fund. To me, that takes away this asset’s single greatest benefit: aesthetic pleasure.

The paintings, prints and sculptures I display in my home and office pay dividends every

How to Grab Significant Short-Term Profits From Technical Analysis

by Mark Skousen, Advisory Panelist

“The overwhelming majority of economic theories, market forecasts, trading strategies, investment systems, hot tips and sure-fire speculations never pan out.” ~ Alexander Green

In the August 14 Investment U issue, Alexander Green urged you to stick with the tried-and-true method of fundamental analysis.

He did so using this mantra: “There is only one thing that dictates where a stock will go: earnings.”

I agree that earnings are the ultimate determinant of stock prices in the long run. But that’s not the only way to gauge where a stock is headed next.

I firmly believe that technical analysis – volume, trading patterns and historical trends – can enhance your returns tremendously and can keep you out of trouble in many cases. Here’s why…

The Problem with a

Three Investing Lessons from Bernie Madoff

by Mark Skousen, Contributing Editor

Last week I caused a bit of a controversy on Fox News when I suggested that Bernie Madoff might do more good than harm in the long run - there are some good investing lessons for everyone to note.

Don’t get me wrong. Madoff himself is a despicable person. Over a twenty-year period, he created the world’s biggest Ponzi scheme worth an estimated $65 billion. Hundreds of individuals, retirees, and charities were hurt or destroyed by Madoff’s deception.

He deserved to get the maximum penalty (150 years).

Nevertheless, I look at all the positive side effects of the Madoff scandal. Here are the three most valuable lessons we can learn from the biggest crime on Wall Street in a hundred years.

Investigate before you invest

Millions have now learned a powerful investing lesson. Don’t blindly turn your hard-earned funds over to a money manager just because he

The Friedman Effect: Is Another Bear Market Around the Corner?

by Dr. Mark Skousen, Advisory Panelist

In 1961, the great free-market economist Milton Friedman wrote a paper called “The Lag in Effect of Monetary Policy,” wherein he discovered a six- to nine-month delay in how long it would take for a change in monetary policy to be felt in the economy and the stock market.

Since then, it has been known as “The Friedman Effect.”

It’s important to understand the Friedman Effect because it can have dramatic impact on your investment decisions and your portfolio…

Milton Friedman & The Friedman Effect

Basically, Milton Friedman found that if the Fed switched from tight money to easy money, or vice versa, it would take about six months before you would see any change in the direction of the economy or Wall Street.

The Friedman Effect worked like clockwork during the financial

The Housing Market: The Disappointment Of The Decade

by Alexander Green, Oxford Club Investment Director

My colleague Dr. Mark Skousen and I have been having a long-running, good-natured disagreement about the direction of the national housing market.

He calls buying real estate “the investment of the century.” I think it’s more likely to be “the disappointment of the decade.”

He thinks housing prices are about to rebound. I say rebounds (in the price of anything) only come off a genuine bottom. And, despite the precipitous drop in some areas, we still haven’t seen a bottom in home prices.

This week the media reported that the S&P/Case-Shiller National Home Price index fell 19.1% in the first quarter.

Bear in mind, that is not the fall from “the top” but just in the first quarter from a year ago. Moreover, the plunge is picking up speed. It was the biggest drop

Investment U’s Outlook: Bull or Bear?

Alexander Wissel, Editor in Chief, Investment U

We keep hearing over and over again that we’re vacillating on our market position and that we’ve taken bullish and bearish stances over the past few weeks. Specifically, readers have cited Alex Green’s article for its bearishness and Mark Skousen’s article for his bullishness.

If Alex Green’s article title suggested bearishness, then I’ll admit fault and suggest that the addition of “Red” might incorrectly indicate that he is bearish when he is not – Alex remains cautious, but bullish.

Let me set the record straight if there has been any confusion concerning our outlook…

In the long-term we are, have been and will continue to be, bullish on the future. In the short-term, we see a number of challenges

Insights from Jeremy Siegel: 3 Reasons Why The Dow Will Hit 10,000 in 2009

by Dr. Mark Skousen, Advisory Panelist

Wall Street has been debating the huge run-up in the Dow Jones Industrial Average.

Was March the beginning of a huge rally that will take the market to new highs? Have we witnessed the proverbial “dead-cat bounce?” The prognosticators have been unsure, uncertain and uncommittal about what they see coming next…

So let me make it clear where I stand: We are in the beginning of a new bull market that will carry us to 10,000 on the Dow by year’s-end - and new highs within a couple of years.

Yes, the recovery will be volatile. But now is the time to buy, despite the big run up…

No doubt there’s plenty of bad news out there - rising unemployment with no end in sight, threatened tax increases on capital gains

How to Become a Market Timing Expert

by Alexander Green, Oxford Club Investment Director

With the recent movements in the markets making many question whether we’re moving up or down, market timing comes into question. A few weeks ago, our Chairman and Investment Director Alexander Green penned an article on market timing for Oxford Club subscribers…

At the Investment U Conference in St. Petersburg, FL a few weeks ago, my good friend and colleague Mark Skousen called me out.

He told the audience that I was opposed to market timing, but laughed and insisted I was one of the best market timers he knew.

“He railed against the housing bubble four years ago - and he was right!” Skousen declared. “He called oil at $140 a barrel a joke - and he was right again! He has been insisting for weeks that the market was oversold and now it puts on

Buying Real Estate: This Century’s Greatest Investment

by Dr. Mark Skousen, Advisory Panelist

Buying real estate? Are you nuts?

Investment U Chairman Alex Green thinks so, what with foreclosures skyrocketing and prices in some places falling more than half from their peak. He says the market is “dead” for now.

But dead doesn’t mean unprofitable.

And as Baron Rothschild often said, “Buy when blood is running in the streets.”

Despite all the bad news making the front pages, real estate-related stocks and funds have been making a comeback; some are up more than 25%, suggesting light at the end of a very dark tunnel.

Equity Residential Properties, one of my favorite REITs, is up 20%. Toll Brothers - builder of high-end homes - has been volatile, but appears to be bottoming.

My basic argument for a turnaround is that the federal government has essentially put a floor under the current real estate market,