hose of you who know me know that I have had a love affair with boats ever since I was a kid. In my youth it was speedboats on various lakes in Michigan. In my teens, and into my forties, it was sailboats combined with an occasional trawler. In later life, however, it has been strictly powerboats.

I have a number of friends who succeeded as investors in the late 1960s, and they are succeeding now. The key to their success more than 20 years ago was that they managed to get out with most of their capital when the market turned down. Most investors were not so astute.

While I was in the Pacific Northwest and Canada most of last week, I did have the privilege of listening to J.P. Morgans (JPM/$55.80/Strong Buy) Chief Market Strategist last Monday. Dr. David Kelly has long been known for his keen insights on the equity markets, with JPMs senior portfolio managers like George Gatz and Tom Luddy steering their mutual funds, on said strategic views, to outsized gains for many years.

In last Mondays strategy report I noted that the week before July 4th has an upward bias for the equity markets. On Tuesday I backed that up by writing, From 1950 to 2013 the market has delivered positive returns 72% of the time during the last two days of June and the first five days of July.

I am always trying to manage the risks inherent with investing (or trading), for as Benjamin Graham stated, The essence of investment management is the management of risks, not the management of returns. Well-managed portfolios start with this precept. And that, ladies and gentlemen, is why I often wait on an investment until its share price is at a point where if I am wrong, I will be wrong quickly, and the incidence of loss will be small and manageable.

I feel like I am living in Bizarro World. First named "Bizarro World" in DC Comic books, the term has come to mean a situation or setting that is weirdly inverted or opposite of expectations. I mean weve had the ATFs Fast & Furious where we sold guns to Mexican smugglers. The NSA is spying on us. The IRS is using its power to target select groups and now the IRS claims it has lost 28 months of Lois Lerners emails. Benghazi. The Department of Justice going after the Associated Press and Rosengate.

In Last Friday’s Morning Tack I had this to say, “While there are no current major negatives from my indicators, this does indeed feel like the end of a trading move and not the beginning of another huge leg to the upside.” What causes such inflection points is when the folks that have doubted the rally finally can’t stand it any more and they throw in the towel and buy stocks.

If the equity markets don’t experience a sell-off this week, we can probably assume the SPX is in its final upside “blow-off” stage on a trading basis. In such a stage the markets make it seem unbearable to be in too much cash, or worse, totally out of the market. Blow-offs usually end with a parabolic peak and often with a buying climax. If you want to see what a buying climax looks like, go look at the “selling climax” at the March 2009 lows and turn the chart upside down. Longer-term, I continue to hold the belief we are in a secular bull market, but in the sho

My friend Jerry Goodman died recently. His nom de plume was Adam Smith, obviously taken from the legendary economist Adam Smith (1723 1790). In addition to the book The Money Game, Jerry wrote numerous other books. In his later years, he worked at another friends establishment, that being Craig Drill, eponymous captain of the insightful Drill Capital Management.

I revisit the Old Turkey story this morning, which I first read in the classic book Reminiscences of a Stock Operator, about the escapades of Jesse the boy plunger Livermore, because of the reference I made to him last week that drew so many questions. The wisdom of Old Turkey is as good today as it was when first published in 1923. The problem with most investors today is that they have never experienced the 1923 1929, the 1946 1964, or the 1982 2000 secular bull markets.

Secretariat (3-30-70 10-4-89) is considered the greatest American racehorse of all time. In 1973 he became the first Triple Crown winner in 25 years, and in the process he set records in all three races that still stand today. In the Kentucky Derby his time was 1:59 2/5, in the Preakness it was 1:53, and in the Belmont Stakes 2:24.

Back in the late 1980s a newspaperman visiting the Raiders football training camp in California had just returned from the Jack London Historic Monument. He read a sample of London?s prose to the Raiders? colorful quarterback, Ken ?The Snake? Stabler:

have often stated that the rarest trait on Wall Street is ?patience.? I have also repeatedly reprised Charles Dow?s quote that, ?The successful investor/speculator needs to ignore two out of every three potential money making opportunities.?

Last Wednesday, when the D-J Industrials were up some 180 points, I could not shake the feeling that this was the ?Wile E. Coyote stock market.? The visual is when Wile runs off a cliff, but his feet keep moving, until he looks down and realizes there is nothing underneath him. The resulting fall was similar to what happened late last week to the equity markets. Indeed, I really did not understand, or trust, last Wednesday?s Dow Wow for the reasons mentioned in these missives.

The Russians Are Coming, The Russians Are Coming is a 1966 American comedy film directed by Norman Jewison and based on Nathaniel Benchley?s book The Off-Islanders. The movie tells the Cold War story of the comedic chaos that happens when a Soviet submarine runs aground closely offshore a small island town near New England and the crew is forced to come ashore. Last Friday, however, rumors that the ?Russians are coming? swirled down the canyons of Wall Street, causing a late Friday Fade that left the S&P 500 (SPX/1865.09) down an eye-popping 24 points.

Spring has sprung, yet many market pundits are worried about the softening economic reports, causing me to remember the book ?Being There? by author Jerzy Kosinski.

Picture this: you?re an investor starting out in the 1940s after World War II came to an end. Your own experience in the contemporary history of the stock market would've taught you that bonds were the safer, and superior, asset allocation over the long-term.

The Great Winfield goes on to say, in Adam Smith?s classic book from 1967, ?The strength of my kids is that they?re too young to remember anything bad, and they are making so much money they feel invincible.? He rented kids with the idea that one day the music will stop (it partially did in 1969-1970 and completely did in 1973-1974) and all of them will be broke but one.

In one of last week?s Morning Tacks I used this email from one of our financial advisors: ?Hey Jeff, about a month ago I emailed you asking if the ~1750 low on the S&P 500 was a good buying opportunity. You emailed back saying ? ?No, not yet? ? and ever since in your remarks you claim not yet. So now that we are well above that level, clients are asking why didn?t we get in ... what?s your recommendation??

'Unseasonably mild and clearing' was the weather forecast going into the Ides of March back in the year of 1888. And it was true, as temperatures hovered in the 40s and 50s along the East Coast. However, torrential rains began falling, and on March 12th, the rain changed to heavy snow, temperatures plunged, and sustained winds of more than 50 miles per hour blew.

I should have guessed that something was wrong when I checked into the Langham Hotel last Thursday only to be told by the valet, "There is a bear on the loose in the neighborhood so watch out." At first I didnt believe him, but when I turned the TV on there it was, and as the cameras rolled the news anchor said, "Pasadena police and wildlife officials are warning residents to be on alert for a black bear after it was spotted wandering through backyards. The animal appears to be moving from home to home."

Arguably, the best magazine of recent times has been The Week, a publication that embraces magazine journalism in its most functional style. The Week is written in one-hundred synopses culled, for the most part, from other news organizations from around the world on all topics. If I had but one publication to read in order to stay informed on just about everything, it would be The Week. In this mornings missive, however, I am referring to "the week" I experienced last week in South Florida.

Its that time of year again when the media is abuzz with that old stock market saying, "so goes the first week of the new year, so goes the month and so goes the year." Admittedly the January Barometer has a pretty good track record.

Well, Im back after roughly a two-week hiatus where I didnt do very many strategy calls, or strategy reports. I did, however, pen a letter regarding my forecast for 2014 dated 12/30/13. And for those who, like me, kicked back over the past two weeks to spend time with family and rejoice in the holidays, and did not read anything, I urge you to peruse my "2014" report.

Year-end letters are difficult to write because there is always a tendency to discuss the year gone by or, worse, attempt to forecast the coming year. Typically, when the media asks where the S&P 500 (SPX/1841.40) will be at the end of the new year, I tell them you might as well flip a lucky penny.

I read the Popes words about inequality following a meeting of our newly formed Consumer Analysts Panel. The panel consists of our consumer analysts, our lodging/housing analysts, our economist, senior management of our institutional sales team, and me. Interestingly, the recurring theme over the course of said meeting was that the top 20% of wage earners are doing fine, but the bottom 20% are not.

Well it is official, Christmas has begun. For me it began with the private wine and dinner party at Morrell, arguably the finest wine store I have ever seen, and anyone that knows me knows I have seen a lot of wine stores! Morrell is located at 1 Rockefeller Center between 5th Avenue and 6th Avenue overlooking the Christmas tree at Rockefeller Center. I had done a gig on Bloomberg radio at Morrell last Tuesday with my friends Carol Massar and Pimm Fox and got invited to the party the next evening to watch the lighting of the Christmas tree.

Well, so far the Federal Reserve is winning out over my timing models that continue to suggest caution should be the preferred strategy in the short-term; and last week that strategy was wrong footed as the D-J Industrial Average notched another new all-time high.

In 1711 the Earl of Oxford formed the South Sea Company, which was approved as a joint-stock company via an act by the British government. The company was designed to improve the British governments finances. The earl granted the merchants associated with the company the sole rights to trade in the South Seas (the east coast of Latin America). From the start the new company was expected to achieve huge profits given the believed inexhaustible gold and silver mines of the region.

Efficient, or inefficient, that is the key question. I would argue that at major inflection points the stock market is ANYTHING but efficient. Thats because, as my dear, departed father used to say, The stock market is fear, hope, and greed only loosely connected to the business cycle! Plainly, I agree and would note that when on March 2, 2009 I stated the stock market was going to bottom that week, I was greeted with cat-calls of disbelief. The same was true with the Dow Theory sell signal calls of September 1999 and November 2007.

That Was the Week That Was, informally TWTWTW or TW3, was a satirical comedy program on BBC television in 1962 and 1963. It was devised, produced, and directed by Ned Sherrin and presented by David Frost. An American version by the same name aired on NBC from 1964 to 1965, also featuring David Frost. And last week was just such a week for me.

A permabull is defined as somebody who is always upbeat about the future direction of the stock market and the economy. Recently I have been called a permabull by certain members of the media, which may be true since March of 2009, but certainly not true over the past 14 years.

In last Tuesdays Wall Street Journal there was a story titled No Rocket? Venture to Sell Balloon Trip Into Space. The article began, Space tourism may not be rocket science after all. An Arizona company wants to develop high-altitude balloons to send thrill seekers to the edge of Earths atmosphere. The trips would cost less than other proposed space jaunts, but passengers wouldnt experience the same intensity of weightlessness.

The boys are indeed back in town as Washington D.C. opened its doors for business as usual last week following a contentious debt ceiling debate and a 16-day shutdown of the government. This outcome had been anticipated in these letters for often-stated reasons, and just like when the fiscal cliff was averted, I now expect the media to turn its focus to the next Armageddon.

Thirty years ago Huey Lewis and the News released their smash hit album titled Sports. It was an instant hit with every song on the album a winner. And last week Huey was playing on the Street of Dreams as participants danced to his hit tune This Is It. Of course, the It in question is a potential deal between the House of Representatives and the President on the debt ceiling and the government shutdown.

The phrase ashes to ashes, dust to dust is derived from the Biblical text of Genesis 3:19 and was adapted to its present form at an old English burial service. Last week I repeated those words as I scattered my fathers ashes next to my mothers in the memorial garden of the church they loved so much in Richmond, Virginia. Indeed, my week was spent in Richmond, Washington D.C., and Baltimore seeing institutional accounts, consulting with political types, and speaking at various events for our financial advisors and their clients.

Thank you Franklin Templeton for allowing me to speak at your world headquarters in San Mateo, California last week. I had the privilege of meeting John Templeton on a number of occasions and it is heartwarming to see your organization carrying on with Sir Johns impeccable traditions. Thanks to all the portfolio managers (PMs) that met with me in the San Francisco Bay area, as we swapped ideas and renewed friendships.

Most recently, I have been in a cautious mode, believing we were involved in a short-term pullback that would carry the S&P 500 (SPX/1687.99) down about 10%. That strategy was working until the Syrian compromise wrecked the rhythm of the decline. Bear in mind, however, the anticipated decline was always couched within the context of a longer-term secular bull market.

Bernie Cornfeld, of IOS Fund fame, coined the phrase, Do you really want to be rich? At the time I was working as a stock broker, and writing investment strategy for E.F.Hutton, having penned in December 1974 that, I recommend a gradual return to significant common stock accumulation (I still have that report). I also learned that you have to evaluate the risks, because sometimes when you go after the big bucks you lose. Then you end up with small change!

I spoke to Ben Stein (American actor, writer, lawyer, and commentator on political and economic issues) a few weeks ago, and his parents sound a lot like my grandparents. My grandparents, and their peers, were just starting out in life during the depression. After experiencing those horrible economic times, saving for a rainy day became second nature.

On October 10, 2008, with the S&P 500 (SPX/1663.50) at 839.80, the bottoming process began when 92.6% of all stocks traded on the NYSE made new annual lows. Thats a six standard deviation event, which is supposed to occur only twice in a lifetime. At the time many investors were liquidating their portfolios because they did not heed Benjamin Grahams advice in his epic book The Intelligent Investor, The essence of investment management is the management of RISKS, not the management of RETURNS.

I dont equate gambling with investing, but many do by using margin, options, exotic derivatives, and what-have-you to leverage their various market positions. To be sure, some seers say that the public has been buying 2 to 1, and even 3 to 1, leveraged exchange-traded funds (ETFs) on 50% margin, which gives those positions 4:1 and 6:1 leverage, in an attempt to try and outperform the S&P 500. When leverage works in your favor, it can multiply profits enormously.

The phrase Dog Days refers to the sultry days of summer. In the Northern Hemisphere, the Dog Days of summer are most commonly experienced in the months of July and August, which typically experience the warmest summer temperatures of the year. In the Southern Hemispheres, they tend to occur in January and February, in the midst of the austral summer. Dog Days is also defined as stagnation, so I think Dog Days is the proper moniker for last weeks market action as all the markets stagnated!

Last week I asked myself the obligatory question, Did I make a bad trading decision by targeting mid-July through mid-August (with the date specific of July 19th) as the timing point for the first meaningful decline of the year? The reason for said question was that every time the S&P 500 (SPX/1691.65) sold off last week, buyers showed up to save the day. And, the operative word is trading because that potential downside strategy was merely a short-term tactical call.

I have termed last Friday (7/19/13) as D-Day because for the past few months my work has targeted that date as a potential turning point for the equity markets. Given the upside stampede, my sense was/is that turn would be to the downside for the first meaningful pullback of the year. In past missives I have elaborated on the reasons and clearly the media has listened.

Everyone kept saying a top is not in place yet. They persistently pointed to the normally reached levels of this or that statistic that were not yet there to reinforce their desire to remain bullish...I have used this quote from Justin Mamis (historian, author, and stock market guru), many times during the years. I use it again this week since we have arrived at my major timing point of July 19th, which for months I have suggested represents the best potential for the first meaningful decline of the year.

Produced in 1941, the movie Citizen Kane is heralded as one of the best movies ever made. It was one of the first to depict the American Dream, and materialism, as less than desirable and therefore causes one to contemplate what actually constitutes a life? Indeed, as a child the central character, Charles Foster Kane, is living in rural Colorado in a boarding house run by his mother (Mary).

Many investors have stepped into the bucket, or left the game altogether. Recall that stepping into the bucket is when a batter steps away from home plate on his forward swing, usually in response to the fear of getting hit in the head by the ball. The Wall Street parallel is that it seems one of the hardest things to do is something you may not have been trained in at an early age.

Weve been expecting you Mr. Bond. The phrase is itself a variant and joins the phrase Play it again Sam as a phrase attributed to a film or TV series. I have used said quip over the past few years, having been wrong-footedly expecting a backup in interest rates. While I did finally target the yield low of last July, the ensuing rate rise has been far slower than I would have thought, that is until the past few weeks.

Ten years ago the COMP was changing hands around 5132. It is now trading at 3423 for a 13-year loss of some 33.3%. Meanwhile, over that same timeframe, the earnings of the S&P 500 are up 83%, nominal GDP is better by some 57.6%, and interest rates are substantially below where they were back then. If you are a college professor such statistics do not foot with your teachings because professors tend to believe stock returns are all about earnings and interest rates. I concur, but would add the caveat, That is if you live long enough.