Retail Sales
The Department of Commerce released its report on retail sales in the month
of April, and sales ex-autos were reported up +0.5% vs. estimates that called
for up +0.2%. The devil of course is in the details.
Now, the sales figures I reported above is what Wall Street wants you to see.
They want you to see the gain, and not the details of what is going on. They do
this to make sure you stay in the market, and they can collect their fees if you
don't hold a larger percentage of your portfolio on cash.
Brokerage firms don't want you to have a large percentage of your investment
portfolio in cash because regulators will frown on the fees they collect for
portfolios not fully invested.
The details of the retail sales report showed that including auto sales, the
number actually fell -0.2 percent in April following a +0.2 percent increase in
March.
In the days ahead, you'll be hearing stuff like the tax rebates (welfare
checks) helped boost sales. Oh, I certainly hope thats not the case. I would
rather see consumers put their welfare checks to better use- like paying down
their credit card balances. But, you know how the story goes- give a person a
dollar, and they'll spend it!
The thing you need to remember about tax rebates is they are temporary.
Inflation
The Department of Labor said import prices rose considerably in April (1.8
percent vs 2.9 percent increase in March). The price of petroleum imports rose
by 4.4 percent in April after spiking 9.2 percent in March.
The CPI data is so misleading that I really have no other explanation other
than- the number is totally useless.
According to Marc Faber, editor of The Gloom, Boom & Doom Report, "food
and health care are under-weighted in the CPI. In fact, the U.S. counts food as
only 8% of the index. Whereas, it counts for about 10% in the United Kingdom,
about 15% in the rest of Europe and more than 18% in Japan".
So the bottom-line here is who is conning who?
Trilateral Commission meeting in Washington
Investing successfully in the stock market is much more than buying a large
diversified portfolio of stocks. You need to know what direction the US and the
world are heading. For example, why would Warren Buffett buy such a large
position in Burlington Northern Railroad while the insiders are selling? He
obviously knows something, and it isn't book value or intrinsic value.
Burlington
Northern Insiders
Warren Buffett
Purchases
Let us examine a few reasons why the world's greatest investor is buying
Burlington Northern (BNI).
Does Mr.