Four blind men were asked to give a description of an elephant. They had not seen one or ever encountered such a beast.

One grabbed hold of its tail. Another put his arms around a leg. The third gripped its trunk and the fourth walked into the side. The description given by each one was correct and accurate except it did not describe the elephant's true form. Each man was right and each man was wrong.

We now have some equally blind men trying to describe what is happening in our economy and the stock market - economists, brokers, bankers and financial planners.

The economists say that because of the interest rate cuts by the Federal Reserve and the huge inflow of cash that the economy will recover in a short time. The bankers opine that all that money that the banks are allowed to loan is not being given to their old customers and they definitely don't want to make new loans to new and unknown companies. The brokers say you are in for the long haul and don't worry the market always comes back. The financial planners have a new plan to diversify your holdings by shifting your money around to take advantage of this current market.

They are all right and they are all wrong. You cannot explain the overall economy with a single solution. We have a complex mix with new ingredients coming to our awareness each day.

To get a better look at this elephant you must stand back not only in distance but in time as well. Ask this question: Where is the country now economically in comparison to September 10 before the terrorist attack? At that time the stock market was going down and we were in a recession. Then the market crashed and the recession was officially declared. The stock market has climbed back up to where it was September 10 and the economists are telling us that the recession may be over.

However, when I look at this elephant it still looks like the same elephant. The basic portions of the economy are still slow and slowing. Unemployment is rising. The banks are not loaning money even though they have it. Venture capitalists are not putting money in new companies. Manufacturing capacity has not come back. We have weaker housing because of higher interest rates and the consumer is spending like he used to. Deflation has reared its ugly head. Most of the new spending has been on counter terrorism that is not productive and taxes have not been reduced so the consumer can have more spendable cash. And a lot more.

The stock market rally has been in anticipation of greater corporate profits that could be a long way off.

Now is the time to be wary of whom you listen to before you invest or make any changes in your investments. The elephant being described to you may not look like that at all.

Al Thomas

Albert W. Thomas has spent most of his life in the field of finance. In 1965 he founded an insurance holding company, Security Dynamics Investment Corporation, after having been an agent and General Agent for several life insurance companies. In 1970 he became cofounder and president of Real Life Estate, Inc., that marketed a unique real estate and life insurance package.

After he became interested in commodities he bought a seat for his personal trading on the Chicago Open Board of Trade, which is now known as the MidAmerica Commodity Exchange. Later he became a full time trader and also acted as a commodity broker for a few select clients. By fellow floor traders Al is considered to be an excellent technical analyst much of which is outlined in his book IF IT DOESN'T GO UP, DON'T BUY IT! It became a best seller on Amazon.

In 1981 he sold his membership on the Exchange and with his wife, Carolyn, lived full time aboard their 41' ketch, the Aumakua (which means guardian angel in Hawaiian). They sailed in Florida and the Bahamas for two years.

He founded World Trading Group in 1984 that grew to the seventh largest introducing commodity brokerage firm in the U.S. with 35 offices from coast to coast, Alaska and Canada. It was sold in 1992.

Al is a graduate of Northwestern University with a B.S. degree in Commerce and is a member of MENSA. He is now president of Williamsburg Investment Company that syndicates his weekly financial column since 1999 to more than 300 newspapers and writes a financial market letter called Over My Shoulder that is quoted in Barron’s and many other publications. A 3-month trial subscription is available on his web site. He is a regular guest on several financial radio talk shows.

His favorite pastime is fishing.

Mr. Thomas is available for speaking engagements. Please call 321-453-5300 for more information.