Use access key #2 to skip to page content.

mperkins89 (98.07)

Next stop 1300

Recs

2

November 09, 2009 – Comments (4) | RELATED TICKERS: PEP , PG , JNJ

The next stop for the S&P is 1400.  We have gone through this series of profit taking and will be seeing a continued trend of gains over the next serveral weeks before another session of profit taking begins.  The S&P has been hit hard, but excluding financials, most strong defensive companies have seen growth in both profit and revenue in the last two years yet are still available for purchase at signifcantly lower price levels than 2007.  Once we see large and strong comapnies such as PEP, PG,  JNJ, KR, GOOG, AAPL, ect. return to and swing above their previous levels we know we are more properly valued.

4 Comments – Post Your Own

#1) On November 09, 2009 at 2:32 AM, selfdestruct2 (72.71) wrote:

Oh Ya baby ! Mperkin, you made my night. It's 2:30 am and I've been drinking tequila and you're saying the market's going up. I own PG & JNJ.   Sounds good to me..... I hope you're right

Report this comment
#2) On November 09, 2009 at 3:48 AM, daveandrae (< 20) wrote:

There are two types of investors, be them large are small.  The first type of investor is the one that does not know what the market is going to do next. The second type of investor is the one that does not know, that he does not know, what the market is going to do next. 

Thus, if you are making your buy/sell decisions based on what you think "the market" is going to do, then you are nothing more than a speculator. And in the end, you will end up with a speculator's financial results. Which, will be poor, at best. 

Yes, the s&p 500 will eventually see 1400. Yet it is absurd to think that this particular index is going to grind higher than 1958-2008, 5 decade, annualized growth rate of 6.8%. Which, ironically, puts us right around a price level of 1043. Thus, if you REALLY wanted to be technical, you could argue, and quite strongly, that the current market is somewhat overvalued.

It was most certainly ridiculously overpriced ten years ago. 

The reason to buy stocks is never because of what the market is going to do "next." The future is ALWAYS unknowable, so why put any energy into it? The reason you should be buying stocks is because of what the market is ULTIMATELY going to do! If you are less than 45 years old,  don't smoke, and are in relatively good shape, as I am, then you are likely to live for another 35-40 years. Over that kind of time horizon, a 50-60,000 handle on the DJIA is simply inevitable.

In addition, once you factor  inflation and it's evil twin, taxation, into current interest rates, the real rate of return from both bonds and cash is quite negative. Thus, if you don't want to run out of money some day, you are now forced to be a 100% equity investor. At current interest rates, nothing else, including "asset allocation", makes any financial sense to me. 

Winston Churchill once said that democracy was the worst form of Government ever created by man, except for all of the others. The same could be said for Buy and Hold investing.  

Thomas D. Edmonds  

 

 

 

Report this comment
#3) On November 09, 2009 at 5:08 AM, outoffocus (23.63) wrote:

daveandrae

Wow. I wish I could rec your comment. 

Report this comment
#4) On November 09, 2009 at 8:11 AM, ayekappy (< 20) wrote:

dave: I saw the future with mark to market accounting changes back in March but everyone was like, nuh uh, that won't matter! So I listened and then proceeded to lose my shirt. But then again, mark to market changes was one of the more obvious signs of the future.

Report this comment

Blog Archive

2009
November (1)

Featured Broker Partners