I hope others will read my post, and express their thoughts, agree or disagree or other, and state reasons for their opinion.
Here's mine: It appears to me that most of the "experts" on TV, print, and Internet are expecting market to continue higher into next year. There are some who have been cautious, and a scant few bears. The contrarian in me tends to doubt the accuracy of the majority opinion. So, I feel that it is more likely that we will see a sharp pullback in the near term, then an eoy/January rally.
Longer term, interest rates are continuing higher, and as a result the Dollar is at highs vs. other currencies. Higher interest rates make bonds more competitive with equities as alternatives for investors. Further, higher Dollar means worsening trade deficit. That makes it more difficult for domestic firms to compete against foreign firms, and lessens their future outlook. As interest rates go ever higher it chokes off the housing boom, and all of the various companies which have benefited from it. As the housing bubble eventually deflates average net worth is reduced, making potential investors poorer, and less likely to invest in stocks. Snug
People get set in their ways and won't change when facts are presented. Now, take Lib, I don't agree with him very often but I do listen to him when he talks stocks and the economy. He knows this stuff. Spec, is a level headed person with a lot of common sense and one should pay attention to him. Persh is a nice guy but doesn't want to change and is set in his ways. Plute seems never to have anything really worthwhile to contribute.
Plute, one should not extoll the poverty situation. I am fundamentally disappointed with the tone of your post on the poverty situation in Fresno.
Damm it--that is not something to be proud of.
Fresno's poverty is a matter of its agricultural base. People come to pick the fruit and the season ends, and they are unemployed. Also, until now Fresno's housing/rents were among the cheapest in the state so it was an attraction for welfare folks who could stretch a buck farther here than San Francisco or Los Angeles. Kids are an income base. The more kids one has, the more money one gets, too. California is a welfare state.
Fresno,most concentrated center of poverty in the USA which Aok would never tell us but big story in today's Washpost.Check 6
It isn't pretty, but DC is not either.
What would you want, an elaboration on the horror of poverty and what it begets ?
I could do so, but I won't.
Now be a good boy, Captain.
Egs-Bravo Zulu! The MB can lead Pontigula to drink but cannot make him think. Worst seat on an airplane is to the LEFT & RIGHT of Pontigula.Just think if Persh had window,Ponte middle & Kiki aisle on LA to NYC. I bet plane would have to make emergency landing in of all places Fresno,most concentrated center of poverty in the USA which Aok would never tell us but big story in today's Washpost.Check 6
Hey ponte back off, the USA is among the most pecfect culture that ever existed on the face of the earth. The best in the new and old world. Anyone bad mouthing the USA is because they are inferior and can not see the way, even if the way is showed to the them. One can lead the horse to water but cannot make it drink. Take a look at S. America, Mexico. Canada is lots better because they immitate the USA>
People all over the world wants to immigrate to the USA where law and order prevails, which can be overhauled, but it is the best in the world. I am proud to be an American.
Yes, there are a lot pythons in FL. The little pets get too big and are let loose. There are many in the Everglades. Maybe, you saw the picture of the 13 foot python trying to eat the 7 foot aligator. It was a draw as they both died. When found the tail of the aligator was sticking out of the python's mouth. It is called your eyes are bigger than your belly.
I agree with much of your post. The most ominous sign for the market is the pervading bullishness you refer to. I read (I think in "Barron's) that bullishness among newsletter writers is extraordinarily high. That is usually a very reliable indicator that the market will go the other way. It's one of the best indicators out there. As with you, I have not seen one person on TV saying "November and December will be bad for the market." That is disconcerting and leads one to believe we will do well to stay even.
It would appear to me that your theory of higher interest rates now providing competition for money that would otherwise go in to stocks is approaching validity. I'm not sure rates are at that point yet. The foreign buying of U.S. government and corporate debt is very high, keeping these rates low. But money market funds are now over 3%. I don't know if you could call that competition for stocks, but it diminishes the urgency of putting the money to work when compared to 1% money market rates. And people held lots of cash, even at 1% yields. There is less incentive to part with it at 3%. I feel no urgency to part with my nuke fund when stock valuations are not cheap and money market yields after taxes are close to matching core inflation. There are lots of people with nuke funds out there.
The higher dollar should make it more difficult to export, but is that significant in an increasingly service orientated economy? But the economy is very good. The roaring economy is the most under reported story of this decade by the corrupt main stream media. Most serious market breaks in our history have occured when the dollar was tanking. I think the fact that the world sees our currency as strong is more good than bad. Also, as business becomes more efficient, the increased productivity can offset some of the headwinds created by a strong dollar.
I believe that Greenie has targeted the housing boom. There is ample evidence that it is cooling. I am even hearing anecdotes that condo flippers are now putting their money in stocks. Of course, I heard this on one of those lame FOX business shows yesterday.
Corporate earnings are still very good. The economy is very good. Do not forget about this outstanding economy. The MSM wants you to forget for fear that Bush will get some credit for it. This roaring economy should prevent a serious market break. I have difficulty seeing the catalyst for a strong market as P/Es are not low. My best guess is for a continuation of the frustrating long term trading range. That said, my 401K hit an all time high last week as my index and international funds are doing well. Of course, I am feeding the 401K with each paycheck. But it's not going up rapidly and I fully expect to see it go down some as we are now bumping the upper limits of the frustrating trading range.
The entitlement situation is grave. We should emulate Chile, who privatized theirs and now runs government surpluses. GWB showed great courage on this front, but failed. Just because you fail doesn't mean it wasn't worthwhile. Also, Phys, majorities are sometimes right, but not always. I decide on an individual basis which majorities I agree with. If they agree with me, they are right.
Hope all are having a good weekend. Incidentally, it is fun watching the Chicago Bears over achieve, but they will get murdered in the playoffs by a good team. Ehrlacher and many other highly visible linebackers are over rated. On many plays, they aren't even blocked.
This is a market top or close to it, the way now is down, the economy is running on all pistons. A recession is always good, since cleans the slate thus makes roof for a more efficient ways. Even if there is a recession productivity will not go down, it could even rise. I have seen it before.
I am mostly out of the market, short term treasury is the way to go. THUS EFFICIENCY. Inflation/stagnation/recession is on the horizont. Energy costs will have to be brought down and the economy must squeze unproductive processes out of the system.
"Majorities are right if they agree with you."
And, you are always right. I find that hard to believe. If so name 5 stocks that you know will higher in 6 months and I will buy them.
All I'm looking for is to find a buyer of ABTBI @ $1.50 and spend the money, like buying a new bike.
The last ten years have not seen the accumulation of anticipated 401(k) wealth even at companies like Abbott. But the biological clocks of 64 mln employees keeps ticking and most will have to take the retirement plunge.
Few will be able to do that without selling some of their stocks, unlike Plute. It used to be that selling a home in let's say Libertyville would allow you to acquire one in Florida and leave you with some excess cash. No more, housing cost in Dixie have overtaken those in the snow zone.
People are in for a surprise. The market will be in a narrow trading range for the foreseeable future, few stocks except those picked by the General (GOOG, etc.) and income securities will be worth holding IMO.
Gute Nacht! Kiki