Step up and call the bottom!

[W2R]

When said governments and central banks come up with something the market has some faith in, IMO, we'll see a violent rally -- but not before.

Love to hear your optimism! I really hope you are right about that violent rally.

I have no idea of what to expect, but naturally my fears are that the market will not see 10,000 again for years.

At least I won't be disappointed.

 

[ziggy29]

Love to hear your optimism! I really hope you are right.

I have no idea of what to expect, but naturally my fears are that the market will not see 10,000 again for years.

At least I won't be disappointed.

I'm pretty sure that if the market hears a plan it thinks will eliminate the uncertainty about the banking and housing messes, a big rally is inevitable. of course, from these levels a big rally still leaves us way underwater. Even a 30-40% pop from here on the resolution of some uncertainty leaves us at around 9000 on the Dow and maybe 900 on the S&P. That might be the time I permanently reduce my allocation to stocks. In retrospect, I should have done it in early January when we were back into the 9000s.

As for Dow 10,000 -- I suspect your right. Maybe it's not relevant, but each time the Dow poked through and gained an extra digit -- whether hitting 100, 1000 or 10,000 -- it didn't hold for long and a massive bear market came and the Dow didn't recover that level for many years.

 

[MichaelB]

I have no idea of what to expect, but naturally my fears are that the market will not see 10,000 again for years.

As for Dow 10,000 -- I suspect your right. Maybe it's not relevant, but each time the Dow poked through and gained an extra digit -- whether hitting 100, 1000 or 10,000 -- it didn't hold for long and a massive bear market came and the Dow didn't recover that level for many years.

Lets see. If the markets overshoot on the downside as they did on the upside, and the folks at GMO are reasonably close with their valuations, then DOW “fair value” today is around 8200. (actually, the project total US large cap at that meager rate)

If it reaches fair value plus inflation of 3%, then it hits 10k in 7 years. Around 6 ½% CGR

If it reaches fair value plus inflation plus real growth of 2%, then in 7 years it is at 11.5k. That’s about 8% CGR from today.

The GMO projections for “high quality” which has a large DOW component is much more optimistic.

W2R and ziggy, I find your posts thoughtful and well reasoned - both enjoyable and very helpful. Nonetheless, I'm siding with growth and opportunity - and that a few large, well run US blue chip businesses are going to continue to get hits and score runs when everyone else is striking out.

 

[Frugality_of_Apathy]

Well we're down to 6767 so the 6800+ guys are going to have to turn in their crystal balls.

I'm going to toss in 5324 as my guess. I stopped contributing when they announced the second "stimulus bill" as it's more akin to stabbing someone to motivate them to run because it worked so well when you gave them a pinprick earlier.

 

[riskadverse]

With more than 3 trillion sitting in MM accounts....I don't think so.


sideline money:
Capital Vandalism: Money on the sidelines?

 

[ziggy29]

sideline money:
Capital Vandalism: Money on the sidelines?

From the article:

Balances in money market funds are also not “cash on the sidelines.”

Depends, IMO. If the cash is temporarily sitting it out but waiting for a more (perceived) appropriate time to invest, it's on the sidelines, waiting to get back in the game.

If it's nothing that will ever be invested or it's a permanent part of an asset allocation, it's in the stands.

 

[RonBoyd]

 

[Bikerdude]

With more than 3 trillion sitting in MM accounts....I don't think so.


sideline money:
Capital Vandalism: Money on the sidelines?

The point I was trying to make (and I believe a credible one) was that with more than 3 trillion in Money Market accounts your statement that "most of the money was in" (the stock market) is a stretch.

 

[mrinvest]

We will see a decline to 4672.

We're in the middle of the steep decline right now, then we will see a STRONG rally to the 8500 - 11000 range. Then the bottom will drop out again.

Anyone noticing the similarity?

 

[Dawg52]

We will see a decline to 4672.

We're in the middle of the steep decline right now, then we will see a STRONG rally to the 8500 - 11000 range. Then the bottom will drop out again.

Anyone noticing the similarity?

Let me know when it gets to the very top then I will bail. DOW only down 37 points. Maybe I won't lose 20k today.

 

[73ss454]

Dawg, you have 20K left?

 

[REWahoo]

Maybe I won't lose 20k today.

You still have $20K to lose? What the hell have you been complaining about?

EDIT: [-]Sick[/-] Great minds think alike...

 

[Dawg52]

You still have $20K to lose? What the hell have you been complaining about?

EDIT: [-]Sick[/-] Great minds think alike...

You had it right the first time.

 

[Koolau]

Bears should beware the ides of March!
Prefer a time range to point, I think we are in the last legs of this down leg and will follow with a nice 6 month rally to the fall. But since numbers are required I will pick 6,352.

Don't ask me what I am afraid of come Sept-Dec...........

Running Man,

I WILL ask as your posts always seem so lucid. Personally, my fear for after Sept. - Dec. is inflation.

Oh yes, my prediction on the DOW is:

5945.

Please send my winnings to the Salvation Army. I think they are gonna need it this Christmas!

 

[Koolau]

No it is a real fund, not just my checking account. The fund is called "Vanguard STAR Fund"!

That's the fund I use for my kids' Roths. Starting small, it was the only V fund I could find which accepted $1k. Haven't had the nerve to see what the kids' funds have dropped to. Figuring they have 30 or 35 years before they will need to tap the funds, guess I won't worry about it. Wish I could be around to fund them until then. Small price to pay, heh, heh!

 

[Lusitan]

When does WWIII start? Surely the market will improve after we go 3-for-3, right?

 

[Koolau]

What happens when the terrorists decide to test the new administration

I think Rush already has, heh, heh!

 

[FUEGO]

That's the fund I use for my kids' Roths. Starting small, it was the only V fund I could find which accepted $1k. Haven't had the nerve to see what the kids' funds have dropped to. Figuring they have 30 or 35 years before they will need to tap the funds, guess I won't worry about it. Wish I could be around to fund them until then. Small price to pay, heh, heh!

Luckily I started it last year during one of the big dips, so it isn't down too much considering it is a balanced fund. Good thing I put the funds in a balanced fund and not 100% equities (in hindsight).

 

[HFWR]

This website: DJIA P/E RATIO, DJIA EARNINGS AND DOW JONES INDUSTRIAL AVERAGE FAIR VALUE opines $657 in Dow earnings in 2009. Assuming a P/E of 10, that gives us 6570.

SWAG, for sure...

Ok, the bottom's in; BUY, BUY, BUY!!!

 

[Westernskies]

I think Rush already has, heh, heh!

I miss the Soapbox.

 

[Bikerdude]

Ok, the bottom's in; BUY, BUY, BUY!!!

I've seen $58 for the S&P500 2009 earnings. So PE-10 = 580 on the S&P. Now to be fair earning estimates are all over the place even at $42. I'll stay with my 5500 Dow low for now.

 

[al_bundy]

SP500 PE hit a low of 7 in the 1970's, but that around 1977 or so

the earnings aren't as important as the expected earnings growth

 

[Red Rover]

I think it will bottom at 4126.

 

[HFWR]

Ok, the bottom's in; BUY, BUY, BUY!!!

What I meant to say was "bye bye"...

 

[FUEGO]

Looks like my call of "6549" has been surpassed. Although if we aren't playing price is right rules, I may still be in the running if this is the bottom (at 6500 today).