History doesn't repeat itself, but it does rhyme. - Mark Twain.

Going through my weekly ritual of powering through Friday's edition of Investor's Business Daily, I was struck by the section which features 200 or so stocks that are exhibiting the greatest fundamental and relative strength.

Almost every company highlighted was associated with the energy business - either oil, gas, coal, transportation, tools or fertilizers. Having been a diligent consumer of the IBD for 20 years, a bell started to go off reminding me that last time that I recall an industry group had such an overwhelming representation of the leading stocks was in 1999 with the Internet companies. Remember the sock puppet and Pets.com?

It was in that Era that my former colleague Henry Blodget infamously made the call that Amazon (NASDAQ: AMZN, $81.62) would hit $400 and almost before he sat down the stock blew post that target on the way to $480. In an eerily similar echo, oil explod

A year ago, we wrote that the launch of the iPhone marked a new era - previously there was B.C., then there was A.D., and now it is i.P.

It was not our keen eye for a phenomenon that fueled our enthusiasm - we would have had to be deaf, dumb and blind not to have not noticed the lines of Apple (NASDAQ: AAPL, $185.64) Moonies lining up to participate in history (even then we would have had to trip over them on our walkabouts on University Avenue in Palo Alto). "Smart phones" weren't that new - having a computer in your pocket was.

Technology's march to the future has become a sprint fueled by Moore's Law. Intel's 8080 CPU (NASDAQ: INTC, $22.90) chip sparked a young Bill Gates and Steve Jobs to be young commanders in the Computer Revolution. The Internet, commercialized with the birth of the Netscape Browser in 1994 showed the world how technology could help you talk, travel, and train - flattening the world and dislocating traditional industries.

What's happ

It's been predicted for 25 years that the United State's position as the über global power would fade away as other empires had done before. Paul Kennedy wrote The Rise and Fall of Powers in 1987 chronicling the pattern of civilizations emerging as the global leader only to proceed to an inevitable decline.

The Chinese Dynasty was the oldest and had the largest tenure, going from 2000 B.C. to 1911 A.D. Paper, watches and gunpowder were all inventions of the Chinese. The Babylonian Empire went from 612 to 539 B.C. The Persian Empire reigned from 560 B.C. to 636 A.D. The Greek Empire went from 500 B.C. to 146 B.C. The Roman Empire became the most powerful civilization ever known from 40 B.C. to 400 A.D. Britain's power and influence was paramount from 1497 A.D. to 1917 A.D. The nearly 100 years with the United States as the most important economic, political and cultural power started after World War I.

Reboot
at 2008-07-28 12:07:52

In trying to keep my head above water in the swirling market seas we’ve been facing, I was tempted to talk about “Negatrend” investment opportunities which I see (the opposite of megatrends). After all, with oil surging, financial stocks purging and markets unable to show any forward wind, we might as well focus on what is going to the bottom of the sea.

Examples of Negatrends would be “old transportation” - 20 airlines have gone bust this year, nobody has “driven a Ford lately”, etc. Traditional media is going the way of the Dodo Bird with the oxygen cut off by the Internet. It’s hard to see how any stocks in these sectors can go up materially.

Another option was to go back to the Oil Bubble theme (“Energy in the Air” -ThinkThoughts 5/31/2008) but with every newspaper headline seemingly about oil prices and the cover story on Barron’s this weekend being “Oil Bubble - When it Will Pop and Why” - we get uncomfortable on the side of convent

With the Dow reaching a 20% decline from its October peak and officially entering "Bear Market" territory, it's natural to feel beaten and broken. More depressing, globally, stocks had their worse first six months in 26 years and with direct correlation, there wasn't a venture backed IPO for the entire quarter for the first time in 30 years. General Motors, which was once and maybe again the proxy for the welfare of America ("how GM goes so goes the country"), fell to a market cap level it hadn't seen since Gerald Ford was passing out W.I.N. (whip inflation now) buttons and at one point on Thursday, was at a price it hadn't seen since Dwight Eisenhower was President.

Core inflation - just 1% 18 months ago - has reached 4.4%. Non-core inflation including energy and food is up 8% (only an economist could rationalize how energy and food weren't "core"). Moreover, oil is up over 40% year-to-date and commodities are up over 30%. The flat world is getting pumped up with 60%