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This is from a RealMoney.com post from earlier today. - Hewitt


The S&P 500 is down -4% YOY. Meanwhile, the CRB is up +34%, gold +53%, a barrel of oil +70%, and natural gas futures +30%. Even lowly sawdust is ramping, per the front page of today's WSJ. This commodities boom won't last forever, of course. But right now the strength in natural resources is impressive.

If you need help designing a portfolio that benefits from the changing world economy, subscribe to the Thomas Nogales Report (www.thomasnogales.com/emails/2008-03.htm). I stumbled across this free monthly newsletter a few years back, and find lots of valuable information in each issue. Thomas Gleason, who writes the newsletter, also wrote "How to Invest If You Can't Afford to Lose." This book explains what assets you need to protect capital in all kinds of markets.

Gleason says steel yourself for more tough times. "By late 2009 this will be labeled as the beginning of a depression…this won't end up as a 1930s deflation, but rather as an unprecedented inflationary recession," he writes in the March issue.

Gleason also notes 401(k) withdrawls at Fidelity went up 17% in December [not sure if sequential or YOY], a sign that a growing segment of the population is under severe financial stress. A 401(k) withdrawl means less money for retirement, and also an early withdrawl penalty. This statistic is bad news for the economy, of which 60%-70% is fueled by consumer spending.

I highly recommend subscribing to The Thomas Nogales Report.
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Hi Hewitt, I checked this out after someone else posted a link on another board. After clicking on the link and reading the article I came away with the impression that the guy was a kook. I may be totally off base, but that was my impression. I guess several things came to my mind - the format didn't look professional, he went from one thing to another very quickly with some points seemingly lacking in facts. It just gave me a sleazy impression. If someone mentions depression, then they had better have a lot of evidence, and it just seemed like a lot of ranting to me. Not that I am saying it can't or won't happen. On the contrary, I think it very well could happen(I am pessimestic by nature). I consider myself just a novice investor here in the TMF world, but that being said, I know a million times more than the average American citizen. Hell, I read your book, and you are a rocket scientist compared to me, but I just had a bad feeling after reading the article. Is he really legit ? What do you think about what he said ? I would appreciate any insight you might offer.

Thanks, Bob
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Bob -

Thanks for buying my book. I appreciate it.

Also, try to overlook Gleason's format. I just read Buffett's 2007 letter to stockholders, and the world's richest man won't win any design awards for his letters either.

As for content, I have read Gleason's e-mail letters for 2-3 years now, and I think his commentary is first-rate. Now, you and I may not like his conclusions. But, he forces us to think about issues we might prefer to ignore.

By the way, since you are a pessimist, you'll enjoy Jeremy Grantham's January 2008 letter to clients here https://www.gmo.com/America/CMSAttachmentDownload.aspx?target=JUBRxi51IIAHTDZLm9ngC5rkzeiT9EOzjWeHBQIMrJ4OdTTFzX5%2bSvlsYiAtNbmvoKc1tZoMI5euyyM53N%2f2YwDybEjMXeUnaMrx4PtB7Vo%3d. Like Gleason, Grantham expects tough times ahead.

Ditto Paul Farrell http://www.marketwatch.com/news/story/tragedy-recession-its-bad-ending/story.aspx?guid=%7B5D72D7E3-76BB-4CAB-B4D0-60F87DA734B7%7D

Since none of us know what the future holds, diversify your hard-earned wealth across several asset classes. To learn more, I recommend reading Gleason's book. The link is at the end of his letter.

One last item about Gleason's letter. Apart from the book, he is not selling anything. So, no hidden agenda. If you do not buy the book, he'll still send you his letter.



Hewitt


P.S. Baseball season is almost upon us. So cheer up!
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Hi Hewitt, thanks for your comments. Being a Civics teacher, I am always asking my students to be aware of bias, be it in written material, TV commercials, or the internet. I tell them that the more information you have the better chance you have in identifying if bias exists, as well as how to view the information. In the case of the Nogales report, I had no previous knowledge of it, so my first thoughts were to be wary. Thanks for adding to my knowledge pool. I too am worried about our economy, mainly because most Americans are up to their ears in debt and have forgotten how to save for the future. I am amazed to talk with friends that make way more than I do, and are saving way less than I am. Maybe some tough economic times are what we actually need to right the ship - I tell my good friend that loves his gas guzzling truck that the best thing that could ever happen to America is for gasoline to start selling for $8 a gallon. Then the brilliant minds would have the economic incentive to work on new fuels, engines, or other technologies that would diversify or end our dependence on the one resource we need so badly, but don't have enough of. Thanks again, and I always enjoy reading your comments. Bob
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