Club Mulgoa

Wednesday, September 07, 2011

Justification for rise of the Dow

According to the reports, the Dow went up because the German High Court said the German government can bail out Greece. What kind of justification is that for the Dow to rise? The debt is still there. If Australia is becoming a bankrupt and China agrees to put some money downunder... the world starts to invest again in the USA. Bizarre but these financial idiots are controlling most of the world finances! And paid handsomely for making such brilliant decisions.

My plot is simple. If a company makes, or will make, good sustainable profit, then that is the stock to invest in. Watch out for debt and fake dividend. Fake dividend is where the company borrows money to pay dividend.

Today, the gold stocks will fall. But POG is still over USD1800 per oz. As RB said, there will be a lag between POG and value of gold sector. Only when the profit figures are shown, then only those slow learners will realize that the gold sector is profitable. Yet it looks so obvious. Especially with KMC and LSA.

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