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Richard Russell: “There are 100 advisory services that weekly or monthly issue lists of stocks to buy.  I've been thinking about it, and I realize that my life has changed drastically since I first started writing Dow Theory Letters back in 1958.  I want to write more about my life, and focus on more than just making money or avoiding losing money.  I want to write about what I learned and have gone through in my long life on this earth. 


After all, there aren't many men of my advanced age who can write with clarity about their thoughts and philosophy.  I've outlived most of my buddies in this industry and my friends, so I really should rename this service, “Thoughts of a survivor,” or “What the last man standing has learned.” There aren't many men who lived through the Great Depression and combat in World War II.  So here goes.


Below we see the signs of a stock market that must be graded bullish.  Here we see that the percentage of NYSE stocks that are trading above their long-term or 200-day moving averages.  The current percentage is a bullish 79.47%. True, back in February the percentage was even higher at 83.28 %.  Utter perfection would, of course, be 100%.  But there is one problem with 100%.  It can't get any better than 100% -- and if it can't get any better, then it can only get worse.




So the current 79.47% is a very encouraging percentage area to be in.  It allows for the percentage to rise towards 100%, and at the same time it is currently far above the critical 50% level.


Successful fund managers have learned to avoid greed.  They know that pigs usually don't make money. In the lead editorial in this week's Barron's, editor Randall Forsythe quotes Leon Black, CEO of Apollo Global Management, as saying, “We are harvesting.”  This private equity giant is now selling some of its equities. 


They have done their “planting” during the difficult early years of the rise and now they are “harvesting” some of the fruits of their plantings.  Black is cashing in some of his profits because he thinks things are so good that they can't get much better.


One of his observations is that there has almost never been a better time to borrow.  The Bernanke Fed has pushed rates down so far that borrowing is almost at give-away levels.  The yield on the benchmark 10 year Treasury is down to 1.63%, a figure that would have been thought impossible twenty years ago.


So while most investors are bubbling with gleeful bullishness, many old timers are worried because they think we're in the period where financing and economies in general can't get much better.


I believe many wealthy men pursue money because they believe vast hoards of money will render them safe.  Actually, only God can keep you safe.  I know this from experience. 


During World War II, General George Patton often led his men in battle, placing himself in positions of great danger.  Patton believed he had been a soldier in ancient wars.  Patton was convinced that he had been on certain WWII battlefields in a previous life.


Later, on an airfield, Patton stepped off an Army jeep and was struck down and killed by a passing car.  Patton was daring God to keep him safe from harm.  One should never try to force God to prove himself.


Unlike gold, diamonds are light and pack tremendous value in small portable sizes.  The big money is well aware of this, and the price of gem-quality diamonds keeps advancing at around 5% a year.  The early Christie's auction this year was supposed to realize $35 million.  It actually totaled $81 million.  At the auction, a 34.65 carat diamond, fancy intense pink, sold for $39 million.  And that was for a single stone.


At Sotheby's an early auction totaled $53 million, the highest ever total for a spring sale.  The top selling lot was a 74.79 carat diamond, potentially flawless, that went for over $14 million.  Obviously, big money is investing in top quality diamonds.  It's concentrated wealth which is portable -- just in case!


Below -- I believe gold is in the process of building a base.  Gold has been up 9 out of the last 13 days, and it may be ready to decline a bit in order to build a more powerful base.”




To subscribe to Richard Russell’s Dow Theory Letters CLICK HERE.


© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.


The audio interviews with John Embry, Dr. Paul Craig Roberts, Jean-Marie Eveillard, Dr. Stephen Leeb, Bill Fleckenstein, Eric Sprott, Gerald Celente, Andrew Maguire and Nigel Farage are available now.  Also, be sure to hear the other recent KWN interviews which include Art Cashin, Marc Faber and Felix Zulauf by CLICKING HERE.


Eric King

KingWorldNews.com

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