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Beware the Blind Man Selling Glasses

Friday, 01 Feb 2013 07:40 AM

By Bill Spetrino

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In the more than 20 years that I have been a professional investor, the past nine months has proven to me that the collective intelligence of the media and pundits is at an all-time low.

Mark Hulbert has been writing and publishing the Hulbert Financial Digest for more than 30 years, tracking the advice of over 180 newsletters since 1980.

Constructing hypothetical, model portfolios according to the advice contained in those advisories, the Hulbert Financial Digest has provided the first objective means with which to compare the worth of investment newsletters. It quickly became the standard source for comparative performance data and now has more than 30 years of research into the performance of financial newsletters.

Editor's Note:
Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions

As of the January 2012 issue, of all portfolios that are also low risk (which is volatility at least 40 percent less than the Wilshire 5000 over the same period) in a one-year time span, my newsletter, The Dividend Machine, was No. 1 in performance of 19.7 percent, which was top-rated in this risk category.

Of course, 99 percent of all the other "pundits" who have discussed markets so extensively have little or no skill picking stocks like proven professionals such as myself do.

However, because of all this misinformation and nonsense the media has reported, I decided to speak out.

Now obviously, in my newsletters I give specific stock picks, but if my readers read between the lines, they have seen that I have called many market tops and bottoms.

For two weeks in a row, at the end of May, I said that JPMorgan Chase and Facebook, which were being slammed by pundits, were great businesses; they just needed to be bought at appropriate prices. Both are up around 50 percent from their lows.

Personally, I don't try and time the market. Only liars and fools can do it properly. However, since the pundits are so determined to keep feeding you misinformation, I am going to set the record straight. Take it for what its worth.

I choose undervalued stocks and lately I have grabbed many great deals that are still out there.

One I put 12 percent of my Dividend Machine portfolio into.

However, the overall economy is LOUSY.

Gross domestic product was negative in the fourth quarter of 2012 and the apologists for the Obama administration and others will peddle this data as being meaningless.

Thankfully, none of them get paid for accuracy.

Raising taxes on the 1 percent and the drop in every person's take-home pay with the elimination of the payroll tax holiday are negatives for future growth.

Corporate tax reform, which Obama so actively supported when campaigning, is now off the table and is being replaced by further taxes on the "producers," which will create uncertainty in the private sector.

The implementation of Obamacare as the year goes on, combined with anti-business rhetoric from the current administration, is also not favorable going forward.

The recovery in housing, which everyone seems to tout, is also a fallacy. Many people cannot qualify for these low mortgage rates and folks like me who can are only going to buy something that is an enormous bargain and are not typical Americans.

Editor's Note:
Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions

Yes, the market could go up, and yes, I’m fully invested in stocks and can spot the bargains.

But Warren Buffett says, "be greedy when others are fearful and fearful while others are greedy."

Unless you are one of my subscribers or are very street smart, I wouldn't buy into all this hype, and if the Standard & Poor’s 500 corrected in the next few months, it would not surprise me.

About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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