Top Stocks For 2011, Best Stock Investments For 2011, Hot Stocks For 2011

 "Consumer spending is up. Time to sell consumer stocks."

Has your humble correspondent finally gone stark raving mad?

Has this summer's endless series of "mixed" (read as "mostly fabricated") economic reportage, bifurcated technical set-ups and volatile 100-point market swings that only yield flat share prices destroyed my ability to make sense of the markets?

Possibly, but if so, I'm not alone.

Wall Street's Growing Gap Between Hype...

A recent Bloomberg compilation of some 159,919 current ratings of stocks found that analysts are thoroughly convinced that corporate profits ought rise some 36% over the next quarter or so.

This is the highest such guesstimate since 1988!

According to an article that appeared in The New York Times, written by Norihiro Kato, the Japanese have gotten good at sloughing off their worldly cares. Japan is no longer the world's number two economy; it was eclipsed this summer by China. But the Japanese are used to slippage. We all know the story of their 20-year economic decline; Japan's GDP actually peaked out about 15 years ago. It has been sliding ever since. That is only a part of the story. In terms of rice production, the Japanese have been downsizing for more than 40 years. Japan's population, too, grew by 1% per year from 1917 to 1977. It peaked out in 2005. There are fewer Japanese now than there were 5 years ago. If the trend continues, eventually there will be none.

Our back page dictum: people come to think what they must think when they must think it. What do people on the road to extinction think? Ask the Japanese. According to Kato, they become less competitive and more reflective, almost zen-like, turning an eye inward, away from striving, fighting, jostling and whacking...gracefully accepting whatever the economic gods send their way. In the meantime, they stay at home and save their money; like a lap dancer in retirement, they know it is all downhill from here.

In the past two weeks, we’ve received two very important developments in the fight against Alzheimer’s disease — one good, one bad.

I’ll begin with the bad.

On Tuesday, drug giant Eli Lilly announced it was halting development of its late-stage Alzheimer’s drug, Semagacestat.

According to Lilly's press release: “Patients taking Semagacestat saw their cognition, or memory and reasoning skills, and their ability to complete daily living activities like getting dressed worsen ‘to a statistically significantly greater degree’ than patients taking a placebo.”

The Dow was flat yesterday. Gold rose $9 to $1,226.

Has the dip in gold already come and gone?

We were expecting lower stock prices...and lower gold prices too. Both went down earlier in the summer. But neither went down as much as we expected...nor stayed down.

But it's still fairly early in this correction. The recession began at the end of '07. We're now approaching the last quarter of '10.

By this time in the '30s, top stocks were hitting rock bottom. The market crashed in the autumn of '29...then bounced...and then started down again. It didn't stop until it hit bottom in July of '32 - nearly three years later. By then, top stocks had lost nearly 90% of their value, from 381down to 41.

It can take longer, however. Japanese stocks crashed in '90. But they didn't hit their ultimate bottom until 2008 - 18 years later - with losses of about 90%.