Posted on 03/15/2009 5:10:58 PM PDT by arthurus
Since this current bear market took sixteen months to materialize, I estimate that within one year from today, fifty percent off the losses will be recovered, which would put the DJIA at around 10,700. The following year, we'll probably see an additional 30-40% rally, which will push it above 14,000.
(Excerpt) Read more at seekingalpha.com ...
P, think of it as being 30% ahead of where everyone else is at this point!
I, too, followed a very conservative strategy and thought myself dumb for missing three run-ups in the stock market. But I lost nothing in the dot.com bust, and have lost only about 5% of my total portfolio, which was 10% stocks.
In the turtle and hare race, I’m the turtle.
Sometimes it’s good to be the turtle.
You shouldn't. He's either a moron or is suffering some type of psychological delusion disorder. The markets could bounce back - a little. But, it won't be for at least 20 months.
We are in such a unique environment, you can throw out almost all historical indicators of the last 40 years. Those days are over. Look at the growth of the market from 1929 to 1980. That will be much closer to what we'll experience the next 08-12 years.
I will sit out the markets until I see the results of the 2010 elections.
Dow 7000? For many more years than you think.
Absolutely 100% correct. Of course, if you ask any high school student today about what they learned about the Great Depression (if anything), they'll tell you that Hoover started it and Roosevelt fixed it through his "New Deal" programs.
Democrats don't have to be right so long as their the ones writing and teaching the history.
Job loss is not really the worst thing in the world to business. Usually layoffs and cutbacks get rid of dead weight. Union shops have an impossible time getting rid of workers. With the larger employee pool, employers can find good candidates that know how to really work. Sure you have to filter through more unacceptable candidates but this is the time to lean up the processes with better people. Revenues will suffer but profitability as a percentage can be maintained.
Taxation is the biggest hurdle to our recovery. Revenue could plummet with rising prices, and that will not bode well for stocks. I think we are done for personally, at least for the next two years. After the right takes back the Congress in two years, and the economy is in the tank, Obama will have to concede. Maybe we can get those tax incentives after all.
Rises are for selling IMO There is no fundamental reason to drive the market up right now. A sideways market is the best we will get where you might get a 1000 points of rise to trade if we are lucky. The downside risk is still pretty large so you should not go more than about 30-50% in the market on the dips, and get more cash out on the rises (depending on your risk tolerance).
Revenue could plummet with rising prices.
http://www.mlive.com/news/index.ssf/2009/03/michigan_lottery_sales_taxes_o.html
(Jenny Granholm calls drop in sin tax revenue “breathtaking”)
Address of the “analyst” Cretin Crumbumbalu is Berkeley CA. Very interesting.
“... Obama will have to concede. Maybe we can get those tax incentives after all.” Um, I think you may be missing Barry’s reason for tanking the economy. Democrats believe raising taxes to fill federal coffers so they can create for dependants upon the federal dole stimulates the economy; Barry wants the eceonomy to flush down the toilet so that he can get a ‘consensus’ to tax to the max. At no point in the swirl down into the septic tank will Barry see there is something wrong with his approach. He doesn’t comprehend simple truths, he creates them, or so he and his stupid minons think.
I predict 9000 by the end of the year then 3800 by spring of 2010. Do I get a prize?
http://finance.yahoo.com/q/bc?s=^GSPC&t=my&l=off&z=m&q=l&c=
Take a look at this chart. My opinion is that if you go to 1995 and continue that line at the same slope it was for the period of 1983 to 1995, you will see what the S&P should be for today. Those two high bumps are fake crap. market bubbles. When the market recovers, it will go up to that point and that’s it. Anything higher than that will be another fake bubble and will be a warning that it’s time to sell.
I got nothing to back this up, it’s just my gut feeling.
Appropriate.
Not until i’m long dead and gone, this jerk must be smoking something illegal.
Yep, you’ve got a point there. Definitely.
I would like to see this kind of a chart adjusted for inflation. And then I would go on the basis of the inflation-adjusted slope of that line.
But, your time period of 1983-1995 seems to have taken a jump-up in the slope, and then it “goes crazy” after 1995. I’m wondering if even that increased slope of 1983-1995 is a bit of a “bubble” that is building all during this time. It’s sort of a precursor to the “big bubble”...
Anyway, my thoughts on the matter... :-)
Only trouble is everyone believes in the “bigger fool” theory. That I am a fool for buying stock at such a high price, but there is always a bigger fool than I out there who I can sell it to.
“We will not have any more crashes in our time.”
- John Maynard Keynes in 1927
“I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.”
- E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928
“There will be no interruption of our permanent prosperity.”
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928
“No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment...and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding.”
- Calvin Coolidge December 4, 1928
“There may be a recession in stock prices, but not anything in the nature of a crash.”
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929
“This crash is not going to have much effect on business.”
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929
“There will be no repetition of the break of yesterday... I have no fear of another comparable decline.”
- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929
“We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices.”
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929
“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
“Buying of sound, seasoned issues now will not be regretted”
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929
“Some pretty intelligent people are now buying stocks... Unless we are to have a panic — which no one seriously believes, stocks have hit bottom.”
- R. W. McNeal, financial analyst in October 1929
“The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin.”
- Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929
“Hysteria has now disappeared from Wall Street.”
- The Times of London, November 2, 1929
“The Wall Street crash doesn’t mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before.”
- Business Week, November 2, 1929
“...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation...”
- Harvard Economic Society (HES), November 2, 1929
“... a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”
- HES, November 10, 1929
“The end of the decline of the Stock Market will probably not be long, only a few more days at most.”
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929
“In most of the cities and towns of this country, this Wall Street panic will have no effect.”
- Paul Block (President of the Block newspaper chain), editorial, November 15, 1929
“Financial storm definitely passed.”
- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929
“I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress.”
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929
“I am convinced that through these measures we have reestablished confidence.”
- Herbert Hoover, December 1929
“[1930 will be] a splendid employment year.”
- U.S. Dept. of Labor, New Year’s Forecast, December 1929
“For the immediate future, at least, the outlook (stocks) is bright.”
- Irving Fisher, Ph.D. in Economics, in early 1930
“...there are indications that the severest phase of the recession is over...”
- Harvard Economic Society (HES) Jan 18, 1930
“There is nothing in the situation to be disturbed about.”
- Secretary of the Treasury Andrew Mellon, Feb 1930
“The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity.”
- Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930
“... the outlook continues favorable...”
- HES Mar 29, 1930
“... the outlook is favorable...”
- HES Apr 19, 1930
“While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.”
- Herbert Hoover, President of the United States, May 1, 1930
“...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent...”
- HES May 17, 1930
“Gentleman, you have come sixty days too late. The depression is over.”
- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930
“... irregular and conflicting movements of business should soon give way to a sustained recovery...”
- HES June 28, 1930
“... the present depression has about spent its force...”
- HES, Aug 30, 1930
“We are now near the end of the declining phase of the depression.”
- HES Nov 15, 1930
“Stabilization at [present] levels is clearly possible.”
- HES Oct 31, 1931
“All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S.”
- President F.D. Roosevelt, 1933
Compiled by Colin J. Seymour, June 2001
http://www.users.dircon.co.uk/~netking
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