Tags: medical | technology | device | ETF

Ride a Bicycle, Relax and Become Rich at the Same Time

By    |   Wednesday, 23 October 2013 07:48 AM

My long-time readers know that I have been out on an extended bicycle tour since April of this year. Six months in the mountains: from California's Trinity Alps to British Columbia's ice-capped Rockies. Doesn't that make you jealous?

You realize, of course, this means I missed all the fuss about Fed tapering (or not), Syria, Obamacare and the Shutdown. Now you are really jealous.

And my Red Sox are in the World Series. I still have a soft spot in my heart for Detroit Manager Jim Leyland, whose infield and baserunners made errors little leaguers would be ashamed of.

You all know I don't like to rub it in, but my medical care and medical technology stocks advanced 20 percent while I was out in the boonies, as well.

OK, OK. Enough is enough. Where does the market go from here? I say onward and upward. Why?

1. The sequester remains intact. Government spending is set to fall a second year in a row for the first time since the Korean War ended.

2. The Middle East is returning the political and economic backwater that it has been for the past two millennia. America doesn't need its oil, Europe doesn't need Russian natural gas and the "Western street" (did you think the only "street" was an "Arab" street? Stop watching mainstream TV) could not care LESS about infighting between Sunnis, Shiites, Kurds, Alawites, ad nasueum. The region has no allies, and it has never stood up for itself. See my earlier article about containment for more detail about this region.

3. In recent days the broad indexes and the transports have surged to new highs, with both volume and breadth solid. Goods are being produced, shipped and sold. Expect GDP growth to continue at a subdued pace in the next few quarters.

4. Medical technology is leading the way. The iShares U.S. Medical Devices (IHI) exchange-traded fund (ETF) is up over 31 percent this year, easily beating the S&P 500, which is up "only" 24 percent. This is so even though IHI is less risky than the overall market! A casual look at the mainstream media, Seeking Alpha and Motley Fool shows you that bearish writers are still all the rage. As long as this clueless "journalism" remains rampant, you can expect the Dow to power higher.

If you follow politics, focus your attention on local state legislatures and House of Representatives seats. This is the core of the Republican revolution that has stymied tax increases and pork barrel spending for the last five years. More about this in future articles.

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Where does the market go from here? I say onward and upward. Why?
Wednesday, 23 October 2013 07:48 AM
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