http://www.investorsdailyedge.com/use-protection.php

You'd Better Use Some Protection!

By Dr. Russell McDougal
Editor, Resource Windfall Speculator

No one wants a repeat of the portfolio meltdown experienced just under a year ago. It was a once–in-a-lifetime slow-motion train wreck. And most of us have chin scars to prove it. No mas!

So, how exactly can you position yourself to prevent a repeat? Let's go there.

The stock market in general is levitating again, in direct opposition to the daily reality we mere mortals face. The feds and their pilots are on auto pump, with their funny money bubble blowing delusions. In fact, I got “stimulated” from their printing a few days ago when driving on a newly paved two lane highway that is perfectly fine… and yet slated to be expanded to four lanes in the coming year.

Thank you, Mr. President! This trickle down stuff is finally showing up on Back Street. Sorry, Elitist Bankers. You only get 96% of the bailouts.

The nightly news is so full of feel-good propaganda that you no longer have to wonder what it was like to live in a Chinese opium den. Trading in clunkers is clearly the best idea ever. Both my spouse and I eagerly await the next official program, designed to pay us to marry newer models (fortunately she almost never reads my essays).

How about the deal to receive an $8,000 tax credit for buying a foreclosed home? Excuse me. That should have said a “new” home. If this plays out long enough, we'll all get our McMansions (That is Scottish for ‘Big House').

The Plunge Protection Team has now entered the experience-enhancing department. If you have a stock portfolio that doesn't go up for four days, please call your broker. Who needs Las Vegas illusionists with this crowd on the loose? The little man behind the curtain is suffering Carpal Tunnel Syndrome from all the lever pulling.

But here's a solution…

Why not fix healthcare (an oxymoron if there ever was one) while the national bankruptcy courts are sorting out exactly which future generation will pay for all this foolishness? You're just a few Bernanke keystrokes and a thousand page un-read document away from life eternal. Teddy knows best.

Just in case a few of you are uncomfortable with this quick return to economic normalcy propaganda here are a few suggestions I have for your consideration:

• Buy some physical gold and silver. Please! Gold is up an average of 16% annually since the turn of the century. Nice performance for one of the most suppressed markets ever. That is just the warm up act.
  
  
• Avoid contrived markets like COMEX and most of the precious metal ETFs. They are only for short term trading.
  
  
• Invest in real assets with long term bullish fundamentals. Gold, silver, oil, uranium, Rare Earth Elements, potash, vanadium and other select commodities come directly to mind. None of these essential products magically appear with central planning dictates. This is the way to make life changing money.
  
  
• In the resource exploration sector, select only premier stocks with long-term staying power due to exceptional management and access to financing. Your stocks must be able to withstand any “stress test”.
  
  
• Do not trust the markets that bought-and-paid-for media jokers hawk like snake oil salesmen. I'm sorry. That's an insult to real snake oil salesmen. 99% of our present politicians should have an encounter with two of my favorite commodities -- tar and feathers.
  
  
• Eliminate as much debt as you can. And become as liquid as possible. See bullet #1.
  
  
• Do your buying only with extreme caution. Pick your company and try to steal it at an absurdly low price. It's called a “stink bid” and is placed well below the current market price. If you get filled, do it again and be thrilled. Look for value, and think long-term.
  
  
• Consider shorting the US dollar and Treasuries. It is clearly NOT un-American to do so. The un-American folks are those who have sponsored the current clear and present danger. And it ain't over.
  
  
• If you are fortunate enough to have made some recent heady PROFITS, take some money to safety post haste. Whether bank stocks, resource stocks, or whatever… the time is right to play cautious. The stock market has been pumped up in an attempt to revisit Bubble Land. When it pops there will be overall carnage once more.
  
  
• Have cash ready for crash-style opportunities. Those who were wise and brave enough to buy shaken but high-quality resource stocks in late 2008 have made small fortunes. In a crisis, even the prettiest babies get tossed with the bath water. Be ready to pluck the pinkest ones for yourself.
  
  
• The S&P should be shorted. It has an astronomical PE. If there was ever a toad this is it. A bear market snap back rally makes those with short term memories totally forget a once-in-a-lifetime disaster. Go figure. Such is the human condition.

This is how we are playing the markets in my research service, Resource Windfall Speculator. And this is also the way I am personally positioned.

Do not have unprotected finance.

Rusty McDougal