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Getting "Safer" To Say What You Think

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June 28, 2008 – Comments (5)

Big Picture had a video, well, the title of the post says it all,
Louise Yamada: Dow 10,000, SPX 1,175, Nasdaq 2,000

I went all red thumbs in CAPS in the fall thinking I needed to see the Dow back in the 10,000 range before going back to out performs, and 9000 Dow wouldn't surprise me. 

What's interesting to me is although I stated my expectations privately to a few friends, I'd have never done a blog on it.  At that time it would open you up so wide for unwanted comments.  I think we are on a 2-4 year downward trend with mini-rallies like the one we saw from March, but overall the trend until the market finishes correcting is downward.

And I think the downward correction is based on fundamentals and over valuation due to irresponsible fiscal policy and money made too easy by artifically too low rates.  I think we are going into the era where we find the low rates are not sustainable and they create illusionary profits and well-being.

Not seeing Dow 9000 would surprise me, but the "rules" do change, say the fed really start printing money rather than increasing money supply through monetary policy of artificially low rates, then I might be changing my expectations.  But without willful destruction of the monetary system with the printing press I expect to see Dow 9000.  I am sure many see using the printing press as a sure thing, but I don't at this point.

5 Comments – Post Your Own

#1) On June 28, 2008 at 10:20 AM, XMFSinchiruna (27.14) wrote:

Dwot... me too.  All it took was a couple of scoffs and smirks from acquaintances at the mention of Dow 10,000 to let me know the time wasn't right yet for such assertions.  As it is, I caught some serious flack for my predictions of $1,650 gold over the past couple of years.  Now that's about the median of the publid predictions for the gold price.

I agree that 10,000 is a serious line in the sand, and I think we'll test or break it.  Your foresight and independent thinking has yielded you great investing success.  You should be proud.  :)

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#2) On June 28, 2008 at 10:23 AM, dwot (51.92) wrote:

If you want to have a laugh at the guys you can "trust," go to this post on Big Picture.

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#3) On June 28, 2008 at 10:41 AM, dwot (51.92) wrote:

Thank TMFSinchiruna.  It is the same deal with housing, Vancouver's housing market as finally topped, but there isn't much in the way of price depreciation yet.  Sales listings are way up and actual sales are down.  I had been getting local "are you nuts" kind of responses to selling in January, and even very confident, "once this happens, these prices are really going to take off..."  Unfortunately my sister is trying to sell now and I just hope she doesn't chase the market down and I've mentioned to her that that is the worst mistake homeowners make in a down turning market.

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#4) On June 28, 2008 at 12:23 PM, XMFSinchiruna (27.14) wrote:

Yeah... I've lobbied pretty hard to convince several friends not to buy houses until the 15-20% delcines turn into 50% of more.  Thay still think I'm nuts.  :)  I plan on buying a home sometime in the next several years for 50% or less than what I would have paid a year ago.  And I'll make the purchase from gains made by investing according to the knowledge that this would happen.  :)  I just wish more people were properly prepared.  Thankfully, the cat is out of the bag now, and I think a lot of people are perhaps now moving to protect their portfolios... but I wish more had been done sooner.

Good luck to us all!

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#5) On June 29, 2008 at 5:11 PM, MaskedMan2007 (99.36) wrote:

Well, dwot, I must admit that you gained a lot of respect from we lately. When I look at your post few months ago, I have no choice but to admit that you were right. Congratulation.

On my side, I like to read the news, listen to the TV and get all the economic and informations in the world. I also like to do a lot of technical analysis.

If I combine my knowledge in both fields, DOW 10 000 is very realistic in the next 3-6 months in my mind.

I heard some telling the market will lost 50%, going to 7000. I don't know if it fill go that deep, but 10 000 looks realistic to me. It would represent a 30% correction on the DJI.

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