I subscribed to the Yamamoto Forecast. Irwin Yamamoto says the S&P500 is 40% overvalued, and the housing market will have a negative effect on the stock market, so put 100% in cash (money market). He has a good track record, so I forked over the $350 annual fee.

Zeal does extensive research, and upon suggestion from Rich and leung-lewis, went to their site. I decided to join,and the newsletter tells me the following about the major indexes:
Name P/E Overvalued
S&P500 20.8 49%
Dow30 16.5 18%
NAS100 34.4 146%

I don’t know how much to trust the numbers put out by the big companies. Think Enron and Worldcom, and today’s options exposure. They can hide their pension obligations, etc.

I do know that 2/3 of GDP is due to consumer spending, and as consumer spending slows, the entire economy will feel the pinch. Who will not be affected? Perhaps our government is large and powerful enough to take on more debt and ramp up spending. Perhaps you have knowledge of certain sectors or companies which will prosper, and have a good valuation. I do not have this knowledge, so I am sitting out.

I made an exception and purchased a lead mining company recommended by Zeal. I am also going to start purchasing bond futures with Chris J’s service. I already signed up for his service.

I checked into companies which I thought would do well in a recession, but they all have PEs over 25.

I would like to take a gold position, and am waiting for all the factors to be lined up just right. I am taking my lead from Chris J, who has shown the importance of making sure that the COT report shows the commercials are long. Zeal also has advice on this, and while they are long term bullish on gold, suggested not buying during the parabolic uptrend.

The big question I have about international and large caps is: how will they do when the US consumer, which powers the economy, pulls back? Can China switch from export to internal consumption? I don’t have the answer yet.

I also would like to learn, and will consider any advice shared by others.