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May 27, 2007 - Issue #060



Interest Rates Rising!



Dow score card for the week ending 5/25/07.

DJ-30: 13507.28 -49.25 -0.36%. In the Real World: 55.40 -0.21 -0.36%.

UP: 12, Down: 18.

Trends (weekly): This is the subjective part.

Rising 21 (-3) 70%:

AA, AXP, BA, CAT, DIS, GE, HON, HPQ, IBM, INTC, JPM, KO, MCD, MMM, MO, MRK, MSFT, PFE, UTX, VZ, XOM.

Consolidating 7 (+3) 23%:

-*AIG, C, -*DD, GM, HD, -*T, WMT.

Declining 2 (n/c) 7%:

JNJ, PG.

+/- denotes change of direction.

* denotes change of category.

Interest Rates Rising!

Along with the rising price of gasoline and food, include interest rates. Good for lenders, bad for borrowers. Can you say "inflation"?

Rising interest rates are also not good for stocks or previously existing bonds. But you already know that, right?

CNBC asked the question: How can investors "play" the private equity market? My answer: They can't. That's why it's called "private"!

The Goldman Sachs' of the world are putting these deals together simply for the fees they generate. They get rid of the deals as fast as they can by reselling them to hedge funds and qualified (read "rich") investors.

A better question: Why would anyone be willing to give up the liquidity of public markets for the non-liquidity of private equity?

If they think that Goldman Sachs' proposed "trading platform", in which unregistered securities interests can be exchanged is a good idea, wait until they see the bid and asked spreads on those deals. Fahgedaboudit!

It's so much more fun to be in business with the world's greatest manic depressive, "Mr. Market". On those days when he's depressed, you buy him out. On those days when he's "overly exuberant", you let him buy you out. It's great fun!







Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!

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1. Own your own successful business.

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