It is definitely true that the stock market runs in cycles – thanks for putting the chart up!

>>Dividends matter in a sideways market. If your stocks aren’t going anywhere fast, getting paid to wait is a great way to make money. Find those high yielding dividend stocks and live off the dividends.

This is excellent advice too. Do you have any recommendations?

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@ Mr. CC

With today’s market, you can almost take your pick when it comes to high dividends. Problem is, finding the companies that can continue to pay them, or in the case of the financials, will the Federal Government allow them to pay dividends if they took TARP funds.

My gut tells me to play the social tendencies that will occur now that we’re in Depression-like thinking, and buy companies that are 50% cheaper (or more) than they were in Jan 2008.

When speaking of dividends individually, I really like a few diversified sectors:

1) Energy trusts/MLPs b/c we still need gas. Some of these are paying 10% – 30% (BPT, DOM, PBT).

2) Bulk shippers (GNK, DRYS) b/c we still ship grain or iron ore.

3) The “sin stocks” b/c college kids still buy Captain Morgan by the barrel and nicotine is still addictive (DEO, MO).

We’re probably going to churn/trade in a sin wave pattern for a while, so you can pick your entry points after a few down days and get a cheaper price. A 10% dividend yield sounds sexy, but when you lose 25% of your principle, that 10% dividend looks pretty flimsy. So pay attention to the charts and try to find those good entry points.

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Oh hell yeah, most definitely the best time to buy! And not to get off subject here, but i seriously thought your title read “Bull and BEER Markets…” I was like hooooold up, this is gonna be good! haha…it was still good, just not in the same way ;)

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@ J. Money

So you fell for my subliminal advertising eh? haha! Note to self — more beer in articles.

We saw some nice buying today that’s for sure. TARP backed CEO’s from Bank of America and JP Morgan bought back tons of common stock yesterday… Bank of America’s CEO bought 200,000 shares and JP Morgan’s CEO bought 500,000 shares.

When that made the news today, we saw a huge jump. Brings a new meaning to bargain hunting if you ask me.

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I am a big believer in supercycles which is why I don’t believe that gold is finished yet. I believe it is only about half done with its bull market. Gold is the antithesis of paper. With the record bull in paper we have had in the 80’s and 90’s, we need some reversion to the mean.
.-= kidgas´s last blog ..So What is Blog Engage? =-.

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Matt SF Reply:
December 31st, 2009 at 6:09 pm

Actually, gold spiking to (inflation adjusted) highs, and subsequently rolling over, might be a good indicator of the beginning of an equities supercycle.

If you look at the inflation adjusted price of gold, it was at an all time high in January 1980 at $2358/oz.

http://www.ritholtz.com/blog/2009/10/gold-inflation-adjusted/

If you take a look at the supercycle chart above, you’ll notice that the 80s bull market began to take off when gold prices began to fall.

Similarly, when gold began to reverse its 20 year downtrend in 2001, the equities market began to tank.

I’m not saying there is a correlation, but you have to admit, there appears to be something going on with the trend reversal of gold and it’s effect upon the equities markets.

Makes fairly good sense when you consider equities are a confidence play on the future and gold is a bearish flight to safety.

(FYI: I think I just let my favorite analytical finding of 2009 out of the bag!)
.-= Matt SF´s last blog ..2000 to 2009 Was the Second Worst Performing Decade for the Dow =-.

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kidgas Reply:
January 1st, 2010 at 10:01 am

The 1980’s parabolic spike occurred in a very short time frame as illustrated in this chart:

http://www.bullnotbull.com/archive/gold1980.html

I don’t think I would call what has occurred thus far rolling over. There has not been enough emotion involved (not enough fear and greed).

Furthermore, gold is not acting like a bearish flight to safety but a realization that paper currencies are being inflated to minimal value. I think that trend will continue. Gold may pause for awhile, maybe even a year or two, but until the US economy is going gangbusters again, will not enter a new bear market.

Of course, the risk is that once the economy does heat up, inflation may rear its ugly head. That is good for gold. The next few years will be interesting for sure. That is why I am hedged.
.-= kidgas´s last blog ..So What is Blog Engage? =-.

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Matt SF Reply:
January 1st, 2010 at 2:30 pm

I’m definitely not saying gold is rolling over at this time. Too many unknown variables at this time to say the recent uptrend would be halted and not continue on it’s path higher.

I’m just saying there is an interesting correlation between trend reversals in gold and run ups in the supercycle chart.

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kidgas Reply:
January 1st, 2010 at 6:38 pm

OK, guess I misunderstood. I agree there are too many unknowns. I agree with your last comment and feel that your statements are fair and accurate.
.-= kidgas´s last blog ..Earnings Report for Q4 2009 =-.

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Matt SF Reply:
January 1st, 2010 at 7:11 pm

Good deal kidgas! Sometimes a level headed, civil debate serves to reinforce what we know or makes us learn new facts we might not want to accept.

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