One of the things market watchers need to take into
consideration is how irrelevant the actual unemployment rate number
is. With labor participation rates hovering at 31-year lows, those
whose unemployment benefits have expired are not technically
counted any more. And how about those who can only find part-time
work? We all know of people that are underemployed these days,
despite having numerous higher education degrees, and are lucky
just to be busing tables if they can get those gigs. Finally, we
have a slew of formerly self-employed people whose businesses have
collapsed in the past few years. These folks are not eligible for
unemployment benefits at all, so they aren't counted in the
unemployment number either.
The jobs created number is really the one that matters these
days. And even with that metric, you need to dig deeper to see
the bulk of jobs are being created. Again, part-time work counts
just the same as full-time when the official "jobs created" number
Commodity plays spiked on today's jobs number fallout, as well
as news China may be looking to increase infrastructure spending.
Gold-miners like Goldcorp (
) and Barrick Gold (
) gained, followed by commodity giants Freeport McMoran (
) and BHP Billiton (
). Financial stocks also benefited from the low-interest rate
declarations continuing to be made by the Federal Reserve. Stocks
like Deutsche Bank (
) and Citigroup (
) led the rally as well there. We're certainly not trying to get
caught up in the super-fast gyrations the markets can deliver, but
at the same time, we need to be sure investor capital is still
being deployed with the greatest of care as well.
Greed and Fear
Having been in the investment game for many years now, I can
tell you the marketing strategy for most companies that cater to
investors these days is focused on two central themes: greed and
fear. Both concepts convert to eyeballs, readers, and subscribers
superbly, but there's one catch. Most smart investors tend to get
fooled only once when they latch on to a investment service, buy a
special report, or make another kind of financial commitment.
Now we can't knock companies for needing to monetize their
businesses, but the one-and-out approach doesn't make for the type
of research ideas investors can count on to build wealth.
Unfortunately we have seen how business media has gotten caught up
with the sensational headlines and promo build-ups, just to feed
the adrenaline junkies that come into our markets, only to be
knocked out in short order. Again, the track record for trading
success is poor, but the Wall Street professionals will certainly
not turn away the next person willing to buy into the million
dollar traders' dreams.
Before you click on the next dramatic headline you see ("stock
market crash coming - what's an investor to do", "Why the Facebook
IPO will make you rich", "Dow to hit 20K by 2015″, and so on),
think about what your goals really are and how hard you worked for
the money you are hoping to see grow. That's all I ask. Anytime you
try to accelerate the process of building wealth, you almost always
end up moving backwards.
A Look to Next Week and a Weekend Preview
Looking ahead to next week, third quarter earnings will continue
to be very light. The focus will likely be on the economic data as
well as the latest Wall Street analyst calls.
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, as well as a detailed explanation of
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