Optimism Runs the Table at Vegas Investment Convention

Thousands of investors flock to Las Vegas for education and advice. Here's what they learned.
By Terry Savage ,

The nation may be worried about the economy, but the prevailing mood at this year's Money Show at Mandalay Bay Resort in Las Vegas was more optimistic than pessimistic.

Each year, several thousand investors flock to the show to receive education and advice. In one session at this year's show, held Tuesday through Thursday, a poll revealed the audience was bullish on the market for the rest of the year by a 4-to-1 margin.

Cautious bullishness appeared to be the prevalent sentiment -- even as speakers acknowledged the current dismal climate for consumers, housing, automobile sales and the impact of higher energy prices.

Well-known stock guru Mark Leibovit of

VRTrader.com

, who has been named Market Timer of the Year for 2006 and 2007 by

Timers Digest

, suggests that the market will dip until midsummer and then rally to at least the highs of last year.

Jim Stack of Investech Research said his technical indicators, such as the advance/decline ratio, show that market breadth is positive, and he's close to getting a buy signal from his proprietary Coppock Guide, which gives a buy signal only once every three to five years.

Speakers disagreed about how high oil prices could climb. More than one expert predicted a sharp decline in oil prices, well below $100 a barrel, citing a slowing world economy, more alternative energy and the collapse of a speculative bubble.

One truly memorable contrarian prediction came from Leibovit, who boldly said that gold would reach $5,000 an ounce in the decade ahead --

after

the U.S. goes back on the gold standard at about $3,000 an ounce to solve its dollar and debt problems.

Options a Hot Topic

The really hot topics at the show involved options and exchange-traded funds (ETFs). Options took center stage as attendees searched for ways to improve portfolio performance or add to income.

Tom Sosnoff, founder of thinkorswim group, one of the largest options brokerage firms, entranced a late-night crowd of more than 300 with his seminar on proprietary trading technologies. The audience learned how to sell "naked puts" and earn a high-probability 4% a month (which works out to a nearly 50% annual return) while being willing to own stocks they like.

ETFs' Ever-Growing Popularity

Exchange-traded funds are becoming more popular as a way to invest in the stock market. With more than 600 exchange-traded funds now available -- and double that number in registration -- ETFs are becoming more popular as an alternative to open-end mutual funds.

Morningstar.com has added a section devoted entirely to ETFs. Jeffrey Ptak, who heads up Morningstar's ETF research, explained the interest in this low-cost sector. His favorite new ETF is an international portfolio of government bonds indexed to inflation, much as our own Treasury inflation protected securities (TIPS) adjust payments based on an inflation measure. The new security, ticker WIP, lets investors hedge inflation around the world.

Global Investing: China and Hot Brazil

Did you know that Brazil's

Petrobras

(PBR) - Get Report

now has a larger market capitalization than either

Shell

(RSD-B)

or

BP

(BP) - Get Report

? Or that in 2007 its total return to shareholders was 123%? Or that it has just announced an offshore Brazilian deep-water discovery that could be as large as any in the Middle East?

Brazil is a hot market, providing its own energy not only through oil but eco-fuels derived from agricultural products. The country is also a food provider to the world through its soybean crop. These are compelling reasons to include a significant international component in stock portfolios.

A luncheon panel concluded that China has another upsurge of domestic growth coming, even though the stocks recently had a pullback. Robert Hsu, editor of the

China Strategy

newsletter, had picks that included the volatile

Baidu.com

(BIDU) - Get Report

-- China's answer to

Google

(GOOG) - Get Report

. Hsu pointed out that China is now No. 1 in global Internet users.

Franki Chung manages two closed-end funds: the Greater China Fund and the Asia Pacific Fund, both of which are listed on the New York Stock Exchange. Given the complexity of researching companies in Asia, it might be better to let the pros do the job and just invest in funds.

I was struck by the absolute focus and concentration on these investors' faces. The tables and slot machines were strangely empty as convention-goers filled the hotel. These investors weren't playing games of chance. They wanted the odds on their side.

And that's The Savage Truth.

Terry Savage is an expert on personal finance and also appears as a commentator on national television on issues related to investing and the financial markets. Savage's personal finance column in the Chicago Sun-Times is nationally syndicated. She was the first woman trader on the Chicago Board Options Exchange and is a registered investment adviser for stocks and futures. Savage currently serves as a director of the Chicago Mercantile Exchange Corp.

Loading ...