Dow...14,000...next?

[audreyh1]

Well, this is about the time the predictors and book writers come out of the closet to sell either gloom and doom or happy days are here again. Recently that nut bag Harry Dent has predicted a big downturn in summer of 2013. He is saying we are going to 3000. This is from the same guy that said we were going to 40,000 a few years ago.

Wait! In March of 2011 he said we might go down to 3300 after a summer (2011) rally. Are you sure this isn't just recycled? Fat good it did him last time.
Harry Dent 3-31-2011: “Major Crash” Coming for Stocks, Commodities Already Topping Out | Fin - Daily Ticker - US - Yahoo! Finance

Oh - wait - here's his Jan 2012 Market Forecast

Harry S. Dent's January 2012 Market Update
By pej at 04:49
Harry S. Dent published his market forecast for the coming year on January the 11th (available on YouTube).

Summary:

Time to get out of stocks NOW.
Austerity is the right policy from his point of view, even if it means short term pain, but can avoid long term insolvency.
Worldwide slowdown coming
4,000,000 foreclosures in the pipeline, which banks have been holding down.
By the time the Fed reacts with Q3, it will be too late.
This looks like the final rally. Where do we top is the final question. 1371 is the top of the range they forecast.
The USD will rally while equities, commodities including gold, and real estate will fall massively.

from Reality Lenses: Harry S. Dent's January 2012 Market Update

His recent predictions graded on wikipedia: Harry Dent - Wikipedia, the free encyclopedia

 

[Texas Proud]

Well, all that QE money has to go somewhere. Hence stocks go up.

All that QE money is buying the US gvmt debt... not going into the stock market...


Now, with interest rates so low, some others are putting more into the stock market...

 

[urn2bfree]

Price to earnings ratios are still below average. BECAUSE earnings have been up up up. And companies re sitting on record piles of cash....Demographics also predict an ever increasing. Umber of new families coming down the pike. HARRY Dent was on CNBC peddling his gloom and doom and when pressed even he admitted that low low Dow number would not last.. It would be a bottom, but one that would almost instantly bounce back up....so he is really just trying to scare some folks to try some short selling.

 

[Mulligan]

Where are we?

Hilarious and true, at least for me...RE did you pick my brain, and then post this chart as your own. That is plagiarism... That is why I just DCA a bit each month, to avoid all those thoughts you on the curve you wrote.

 

[REWahoo]

Hilarious and true, at least for me...RE did you pick my brain, and then post this chart as your own. That is plagiarism... That is why I just DCA a bit each month, to avoid all those thoughts you on the curve you wrote.

I [-]plagarized[/-] [-]stole shamelessly[/-] borrowed that from another forum member as it really nails the thinking of way too many individual investors - and serves as a reminder why I need to stick to my AA and rebalancing plan.

 

[bondi688]

The Ravens are killing the SF 49ers. Oh, no!! Have you heard of the Super Bowl indicator? In 80% of the time, the stock market goes up in the year the NFC won the Super Bowl and declines if the AFC won. Let's hope this year, it is the 20%.

 

[pb4uski]

But the Ravens were originally an NFC team so the market will definitely go up. Whee!

 

[AndrewJackson]

I think it's a case of "I need to make something up that's sound intelligent" as opposed to admitting I just don't know.

While I agree about them making/filling their news with made up assumptions, I can tell you I have heard from multiple people in the financial industry this exact line. My favorite quote that I have heard this year so far is "Can you imagine how bad stocks will do if the economy starts humming again" (referencing the effects of ending qe and the fed exiting).

All that QE money is buying the US gvmt debt... not going into the stock market...

This is true, but you have to remember that buying bonds creates more money in circulation which increases the prices of real goods/companies. The shear addition of more money is definitely a positive for stocks.

Definitely agree with your statement about the interest rate effect. Misallocating capital, just like good ole Ben Bernank likes it.

 

[audreyh1]

Oh well, it was nice while it lasted!!!

Actually, Mondays have been downers lately.

 

[okapi]

Watching CNBC will make you broke and stupid.

 

[MichaelB]

Oh well, it was nice while it lasted!!!

Actually, Mondays have been downers lately.

Mondays were always downers, but that changed when I quit working.

 

[timeasterday]

All that QE money is buying the US gvmt debt... not going into the stock market...

The Fed is buying billions in Mortgage-Backed Securities. As of last year banks were one of the largest holders of MBS's. JP Morgan & Wells Fargo are the top dogs in that market and they are definitely profiting from this. They certainly won't sit on that money - it has to go somewhere. Additionally, the yield on those MBS's goes down as the Fed buys more, but mortgage rates haven't really dropped significantly. That spread in yield is at a record level and means more profit for banks.

 

[audreyh1]

Mondays were always downers, but that changed when I quit working.

Good for you for not watching the markets!

 

[MichaelB]

Good for you for not watching the markets!

Oh, I watch. But, in one way, for me the markets are like DW - I never can quite figure them out, even though I feel I should be able to, and every time I think I've got it, something happens to show me just how wrong I can be. So, in both cases, I've stopped trying to figure them out and now just go along with them. In both cases it has been rewarding so far and I'm optimistic the future is rosy.

 

[Texas Proud]

The Fed is buying billions in Mortgage-Backed Securities. As of last year banks were one of the largest holders of MBS's. JP Morgan & Wells Fargo are the top dogs in that market and they are definitely profiting from this. They certainly won't sit on that money - it has to go somewhere. Additionally, the yield on those MBS's goes down as the Fed buys more, but mortgage rates haven't really dropped significantly. That spread in yield is at a record level and means more profit for banks.

I don't disagree... and I don't think my post stated otherwise...

I was just trying to point out that the QE money is only going toward buying bonds... the ripple effect this has is predictable, but QE money is not going into the markets or banks etc., it is other money...

So, QE is invested in 'safe' investments pushing down their price which results in others taking more risk... kind of a neat way to push off that risk...

 

[Severinooh]

Should a soon to be ER buy here or wait till a dip occurs?

 

[REWahoo]

Should a soon to be ER buy here or wait till a dip occurs?

Others may disagree, but my opinion is a soon to be ER should have an asset allocation strategy in place and be asking is it time to rebalance, not is it time to buy.

But to answer your question, no one knows. That's why market timing hasn't worked very well for most investors.

 

[pb4uski]

Watching CNBC will make you broke and stupid.

Not true. It will make you stupid but it will only make you broke if you act on their "advice".

 

[donheff]

Just read an article that pointed out that last month had the largest influx to equity funds in history. maybe a sign that all the worry warts are getting back into the market. If so, we should see a hefty increase this year followed by a temporary crash wiping out this year's gain plus some. Then the worry warts can bail again.

Or something entirely different will happen.

 

[Severinooh]

OK, let's try this again, have well over seven figures in retirement accounts and have missed the latest rally. Just thought I may get some advice that I can understand.

 

[imoldernu]

On Monday, the President signed a bill that authorized $450 Billion of borrowing, to avoid exceeding the $16.4 Trillion Debt limit, that would trigger
default. The $450B only pays the interest on the debt, so this just kicks the can further down the road, and doesn't resolve the problems.
At some point... this year, the national debt will exceed the GDP.

 

[MichaelB]

OK, let's try this again, have well over seven figures in retirement accounts and have missed the latest rally. Just thought I may get some advice that I can understand.

Don't time the market.

From yesterday's NYT, just the thing you need. The Question You Should Be Asking About the Stock Market - NYTimes.com

With the stock market up more than 100 percent from those scary days in early 2009 and up 16 percent in 2012 alone, we’re now hearing plenty about how small investors are getting back into the market. Andrew Wilkinson, the chief economic strategist at Miller Tabak Associates, referred to it as a “a real sea change in investor outlook.”
It seems we’re in danger of repeating the same old cycle of swearing off stocks forever during scary markets, missing a huge rally and then deciding it’s time to buy when stocks are high again. On the flip side, I’ve had a number of conversations with Main Street investors who are asking if now is the time to sell because the Dow Jones Industrial Average is hovering near 14,000 and the S&P 500 stock index is around 1,500 again.

 

[heeyy_joe]

OK, let's try this again, have well over seven figures in retirement accounts and have missed the latest rally. Just thought I may get some advice that I can understand.

If you are not in the market now, enter slowly by cost averaging into your preplanned target asset allocation over the next twelve months...

Bulls make money. Bears make money.

And pigs get slaughtered.