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Year-End Rally Update

So far, other than the assassination of Pakistani opposition leader Bhutto yesterday and the market’s selloff, the rally has played out as the technicals indicated.

Unfortunately, the market sentiment is staunchly bullish – a bad technical indicator that everyone is complacent. The rally will likely continue into mid-January, but we will probably see a selloff much like the one we had last February.

Not all is dire as we will be employing the same plan that we used last year. We’ve been selling off positions into the rally to raise some cash, for two purposes: (1) raise the cash position to take advantage of any pullback in prices; and (2) right-size tax positions in taxable accounts, either booking profits to take advantage of previously booked losses or vice versa.

As we head into 2008, it will be an even bigger year for Ag, gold, and energy than 2007. We will be concentrating on making sure every account has a full allocation to those areas as much of the rest of the market will have a difficult 2008. Other areas, like defense, infrastructure, and biotech will also be important and likely to outperform the rest of the market.

This is my last post for 2007 as I’m headed to Krakow, Poland, for the big New Year celebration.

I want to wish you a Happy New Year and a profitable 2008, and thanks for reading!

Mark