Dan Frishberg Share News On the Monday Morning on the MoneyMan Radio Show!

1. ATTENTION INVESTORS DROWNING IN A SEA OF BAD ADVICE
The MoneyMan Report Monday Morning Update By Daniel Frishberg
As high tech stocks sell off, and I see the usual suspects changing their minds and becoming
more negative, I’m happy to see that the hard hit stock, ANAD, out hiring and looking for new
interns. They don’t expand their payroll when the sales department is reporting reduced demand.
Another good sign was a notice in a Dallas business journal that TriQuint Semiconductor
(TQNT) plans to hire 130 people for its plant in Richardson, Texas. You aren’t going to hear
news like this when the focus of conventional market news is on a natural disaster and selling of
stocks.
Everyone is not a regular listener, so bear with me while I repeat one more time that in the third
week of February we had demand at the highest point since the crash of 08, and supply – people
willing to sell – at the lowest point, looking at anything but the very shortest term market action.
What has changed? I’d say CCJ is not a worthwhile gamble at this time. I can’t see how the
nuclear generating plant buildout can do anything but suffer a setback. Certainly according to my
risk numbers, uranium has fallen in risk/reward score.
Flash memory demand has been strong, so I think the odds are that we'll see some supply
shortages in at least the near to mid-term. No one likes to see tragedy, but SNDK, Micron
Technology (MU), Samsung and Hynix will most likely experience more demand and higher
prices than they would have otherwise.
Uranium’s hit is good news for natural gas, and coal.
What about the usual suspects who are now worrying about the end of the bull market, and the
bears taking control? The number is growing, and they are so articulate you forget that these are
the people who have lost you money every time you’ve listened to them in the last decade, so
here’s the fact:

2. At of the end of the third week of February, the demand for stocks was at its highest point since
the bull market started in March 2008. Also investors’ willingness to sell was at its low point.
Obviously there is some selling when the stock market corrects, and some buying is curtailed.
Yet, in all of the back testing, and throughout my life there has never been a new bear market
that started within a couple of weeks of an environment like that. Always, when the markets roll
over, sellers have been getting more active and more eager to take profits - get out of the market,
and reduce risk - for months and sometimes more than a year before a new bear market has
started. I know a lot of people were blindsided by that very intense crash in autumn of 2008.
They were blindsided because of the optimistic calls from that same group of usual suspects,
who are now calling for the protracted bear market. They didn't get it right then, and they aren't
getting it right now.
I can give a very simple description of where the stock market is right now. It is in the middle of
the correction, possibly late in the correction, but I don't believe that correction is over. We are in
a long term bull, but in a frightening and pretty painful correction. Each of these swings and
vibrations, in either direction, have lasted longer than they used to. I guess I wish we would have
these moves occur sooner and be less intense, but who cares what I think.
The trading that is done by big players with quantitative analysis and big computerized programs
that jump onto trends, is probably the difference; and I think that's probably why these trends last
longer than they would if they were being run by human beings. Nevertheless they have been
consistent, and so they are getting easier for us to read and anticipate.
What each investor has to decide for himself, is does he feel he can be accurate enough to protect
himself, even though we are now most of the way through a correction? The odds are, we go
down further. But the odds also are that the new rally starts suddenly, not too long from now, and
I would be willing to bet that most people lose money by trying to add short positions to take
advantage the impending downside. Most of us would be better off to focus on a little further out
time frame, and I see nothing to indicate that the odds don't favor a continuation of the bull
market.
I will remind you of one simple shorthand way that I can see, that we’re not quite done going
down. It’s always a part of my MARKET X-RAY. I mentioned a week or so ago that one timing
indicator is the number companies whose stock prices are below their 30 day average.
There are times when you get up way above 80% of stocks above that average. When you arrive
at that point stocks start to feel pretty expensive. At the major turning points in early July, and
again in September, 80% of companies were below that average price. That was the moment of
turn, when too many people were leaning to one side of the canoe.
When I was explaining this a week or so ago, the number was at about 50%. This morning it's at
about 36%.
Once the number of companies with prices above their thirty day average moves substantially
below 20%, the market is getting extended the downside.
If conditions improve, a new round of buying and another leg up could start at any moment. But
getting below that 20% mark would make for a fairly easy entry point. Since we have come this

3. far, I would not be surprised if we got there. By the way, in the little correction in November we
never did get down to the 20% mark.
People have been asking me forever to explain more about how I calculate the market x-ray. I
have given general answers for years, and people still want to know more about it. So now the
technology allows a class on how to do it.
Not only will you find out how the professionals, who have tens of thousands or millions of
dollars to spend on their research, do this kind of reality analysis, but I will show you cheap ways
to calculate what's going on beneath the surface, so you can make your analysis based on what is
rather than what a bunch of experts believe should be.
Here's what the market x-ray is really going to do for you if you are willing to do a little bit
rigorous work. (If you don’t feel like doing this type of work, don’t worry. Most people don’t.
They just have no chance to compete using the easy tools they pay so much to learn.
In that case, don't waste your time. Just let someone else, who loves the work, do it for you. In
many of the places where we air, one good way to get this analysis done for you without you
having to do it is Barrington Financial who is very active in the Sacramento area; also in Miami,
Atlanta, and Houston.
Many nonprofessionals who are quite smart, and many beginners and novices also, are
subscribers to my INNER CIRCLE, and more people are joining every day. Of course, I update
MARKET XRAY in that forum for subscribers every week.
Still many people would like to be empowered, and would like to be able to understand how to
know what is in fact happening in the markets, rather than what a bunch of experts think should
be happening.
I believe lots of people don't mind doing a little bit of figuring for themselves, and I think
empowering yourself so that you can act with confidence is important. Even if plan to hire
people how can check to make sure you agree with what they are doing with your life savings?
Here's the reality. It's really very simple. The conventional good deals are easy to identify.
Growing companies with a very high return on equity or return on capital. This stat means they
are utilizing their resources well. It helps identify a well-managed company.
Buying this well-managed company when it is fluctuating to the cheapside of its range obviously
means you get a better deal.
How do you know when a company is cheap?
A good way to do that is to check the number of years of profit you're paying for it – the price to
earnings ratio (P/E).
By the way, in some industries, like oil drillers and companies with a lot of depreciation, you
would use price to cash flow.

4. Anyway buying well-managed companies at the cheap end of their range, with the simple rule of
thumb above will mean that you make twice what the stock market makes over any long period
of time.
So how could it be that most people end up losing money in the stock market, if it is that simple?
The answer is that sometimes when you buy a stock that's a good deal the price keeps falling -
sometimes for weeks. Sometimes for months. And sometimes – not too often – but sometimes,
for years.
At those times, investors give back all the money they’ve made in rational markets.
The one extra skill that is crucial, is to know when - in spite what you think should be happening
- the stock market is going to take your money.
When buyers are on strike, sellers want to sell, the multiples are shrinking, and investors are less
willing to assume risk, anyone who recommends buying and holding stocks is an idiot or a liar.
And, when the stocks are running - when buyers are extremely eager to assume risk, and sellers
don't want to sell - you can make money on momentum stocks that aren't even really good deals.
Understanding supply and demand in the stock market is the only way to be empowered and to
be able to create reliable results. Nothing else really helps if you lack this one missing piece of
the puzzle.
The stock market is our societies way of financing businesses, and deciding which businesses
will be financed. But the markets are now so big and have some many different forces
influencing them, that almost all investors end up losing, because they don't have the skills that
you will get in my MARKET X-RAY FOR THE WEB CLASS. LEARN MORE HERE!