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ikkyu2 (99.45)

Climbing the wall of worry

Recs

18

February 28, 2012 – Comments (8)

We are officially climbing it now.  DJIA breaks 13,000; the major news headline on Google News asks "When will it break 14,000?"

The prices that make up the DJIA are of course denominated in dollars that have been significantly debased during the last high, but that doesn't matter.  What matters is that everyone smells multiple expansion in the water and people are piling on.

At some point - the market always does this - they will overshoot and then there will be a 3-6 month period of froth as valuations become unattractive.  I am paying close attention and will try to notify you of the top, as I did in this space in Oct 2007.  If I feel like we're topping, this time I'm going to try to time it.

At the moment, however, I am all in. 

8 Comments – Post Your Own

#1) On February 28, 2012 at 10:27 PM, awallejr (79.91) wrote:

Sell in May I suppose (worked 3 out of the last 4 years).  Dow 13,500 by then and then a correction.  So says my crystal ball.  Funny thing is despite the run up there are still a ton of "cheap" stocks out there.  General rule of thumb is PE at 15 is fair value for most companies, yet we have a ton selling for even less than 10 PE and companies still yielding  over 10%.

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#2) On February 28, 2012 at 10:39 PM, ikkyu2 (99.45) wrote:

Agreed.

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#3) On February 29, 2012 at 5:33 AM, portefeuille (99.76) wrote:

S&P 500 index (1372.18).



enlarge

(from here)

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#4) On February 29, 2012 at 8:28 AM, Valyooo (99.80) wrote:

Even though I am a temporary bear on the market (looking for a 5% pullback) I don't know why people feel the market is way too high.  We are at the same place we were 5 years ago, and we have significantly more money floating around in the system.  I find it hard to believe that in 5 years, we have less goods floating around the world than we used to, and even if our economic activity was still completely at a halt, the printing presses have to push it up a lot.  Inflation is ALWAYS the name of the game, and it always has been, so we WILL push to all time highs within 2 years.

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#5) On February 29, 2012 at 11:56 AM, awallejr (79.91) wrote:

Ah thanks Porte, been awhile since I saw that chart.  Looks like we are finally getting above the bottom line.  Has been awhile.

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#6) On February 29, 2012 at 1:17 PM, chk999 (99.98) wrote:

Porte, that's a very handy chart, but could you put real dates on it too? The number of days since a particular date makes it hard to correlate with other things.

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#7) On February 29, 2012 at 2:28 PM, portefeuille (99.76) wrote:



enlarge

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#8) On March 02, 2012 at 4:23 PM, ikkyu2 (99.45) wrote:

Awesome charts, porte.  Thanks.

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