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Varchild2008 (83.61)

The Reason for Optimism: DOW 15,000 Prediction

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February 21, 2010 – Comments (2) | RELATED TICKERS: F , PEP , WHR

THE REASON FOR OPTIMISM:  DOW 15,000 as BUY and HOLD lives on!

http://finance.yahoo.com/news/Stock-market-nears-correction-apf-1736759903.html?x=0&sec=topStories&pos=4&asset=&ccode=

Beacuse of the article above explaining most of my thoughts, I am going to release this BLOG POST I had planned to do after the February 25th showdown with Pres. Barack Obama and the Republicans. 

I have sensed that there are plenty of Motley Fool Pessimists raving against any notion of economic recovery.   I hate to burst your bubble but the economy IS RECOVERING.   Let me ease those thoughts out there with the following chart from GALLUP on Job Creation in February:

http://www.gallup.com/poll/110134/Gallup-Daily-US-Job-Market.aspx

46%  not hiring/laying off
26%  hiring
22%  laying off

22% laying off against 72% that are not!!!  and 26% of which are hiring...  How is this not a sign of a recovery is brewing?

"BUY and HOLD"  sorta imploded in 2007 through beginning of 2009.  It became more about "personal survival" and "panic."    Now that the market bottomed in 2009, the mood has shifted away from Day Traders and straight into the hands of buy and hold investors.

A lot of examples are out there for stocks like (WHR)....(F).....(KO)....(PEP)......(MTL)...showing a chart from the market bottom that trends UP long term inspite of short term dips or short term sideways trading.  Just check the charts on a number of stocks...large cap or small cap... There will be some losers but most of the company's have charts with long term gains staring at you in the face.

On March 9th we bottomed in 2009.  So we are close to our 1st "Thank God We Bottomed" Anniversary.  What are you doing ahead of this??  Panicking in and out of Stocks???
Selling out of equities like crazy???

I sure ain't....  Which is why I laughed and laughed when I heard not 1 but 2 radio commercials from 2 different company's talking about how investors should SELL out of their equities!!!

One such company that sure sounded like they were trying to tell people to sell off their shares of stock and instead buy their mutual funds was...........THE MUTUAL FUND STORE.

ADAM BOLD's radio commercial is evidence of the *fear* mutual fund company's would have if more and more of us individuals decide BUYING and HOLDING onto individual stocks was better than any mutual fund Adam Bold could offer you:

http://www.mutualfundstore.com/About.aspx

Your average investor today is a BUY and HOLD investor and not a DAY TRADER because of this phenomenon.....Also... Mutual Funds are losing favor versus Individual Stocks.

If Mutual Funds were not out of favor or becoming out of favor, why do you suppose then a company like the MUTUAL FUND STORE is asking people to dump their stocks and buy their mutual funds instead?

It's simple......  BUYING and HOLDING  stocks generates the best gains for an investment out of any mutual fund out there by a long shot.  No mutual fund can beat the average stock market investor..... not 1..... 

http://stocks.about.com/od/investing101/a/Youownstocks.htm

From About.Com article shown above,

"Mutual funds are great vehicles for funding retirement plans and you’ll find them in your 401(k) or other retirement plan at work. They also work for the investor that simply doesn’t have the time or energy to consider individual stocks."

So a 9.2% plunge in the S&P 500  has failed to generate a Bear Market despite countless analysts and so called "ECONOMIC EXPERTS" predicting DOOM and GLOOM.....  And ADAM BOLD's radio commercial. 

Once again a pull back becomes a BUYING opportunity and not a PANIC indused SELL-A-THON.

So get a grip out there....  The world isn't coming to an end... and yet you would think it was reading the following articles:

THE BULLS LOOK SET TO STRUGGLE
http://secure2.thestreet.com/cap/login/rm_mbp_yho_clean.jsp?cm_ven=YAHOO&cm_cat=PREMIUM&cm_ite=003190&flowid=56183302e&url=http%3A%2F%2Fwww.thestreet.com%2Fp%2F_yahoo%2Frmoney%2Frevsharkblog%2F10679086.html

THROWING DOWN THE GAUNTLET
http://www.marketwatch.com/story/dow-theory-letters-challenge-the-bulls-2010-02-10?siteid=yhoof

DOWS REVERSAL COMES TOO LATE FOR GLOBAL SELLOFF
http://online.wsj.com/article/SB10001424052748703894304575047511152642270.html?ru=yahoo&mod=yahoo_hs

The reason the U.S. economy is on a path of recovery is because a lot of positive things are going to happen on our way up:

TAXATION
If more businesses lay off then the Unemploymet Tax skyrockets upward....
Once businesses stop laying off and start hiring then the Unemployment Tax plummets.

The upcoming election cycle may be enough to push enough Republicans into power that believe in cutting taxes for small businesses and keeping our country competitive that we simply have TOO MUCH GOOD to look forward to.....

And who knows?  Maybe the $15 billion slush fund known as the "JOBS BILL" will have an actual tax cut in it or something useful for generating job growth long term versus short term stimulus slush fund spending.

Then there's the whole business out there related to the 3 free trade agreements.  One of which happens to be with Korea and deals with South Korea's automotive sector that could possibly generate plenty of jobs in MICHIGAN / DETROIT.... that are much needed jobs.

Of course... I choose to speculate positively on these free trade agreements being a boost for us if and when they actually occur.

If the Republicans take over the Governorship of Michigan.... then again...we can expect Tax Cuts for small businesses to generate even more economic growth in America's worst state for employment.

heck?  Feeling OPTIMISTIC on America SHOULD START with Michigan!  

Check out the ideas for boosting Michigan economy penned by Rick Snyder to see what COULD happen should any of his ideas get adopted by the next Governor or if Rick himself becomes the next Governor of Michigan:

http://www.rickformichigan.com/vision-plan/reinvent-michigan

There is TOO MUCH POSITIVE NEWS that looks like it will happen.... too much..... to sit there and stew over 1 thing over another.  Sovereign debt?  Dollar Crisis???   Sure maybe....but I say maybe not!    Prepare for a new brand of HOPE and CHANGE!

In conclusion:   The Naysayers still expecting our economy to crumble and the stock market to go with it are completely forgetting about the American Individual Spirit to survive and grow our economy and be competitive.....  Certain factors can knock us down for awhile....but we can and will rise to become stronger than ever before.

So....  I have my DOW 11,000  prediction in place for 2010.    
How about this???     DOW 15,000  JUNE 2012.    I'll take this prediction to the bank litteraly.

http://www.cnbc.com/id/35366827/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo

2 Comments – Post Your Own

#1) On February 21, 2010 at 5:27 PM, Varchild2008 (83.61) wrote:

DISCLOSURE: I won 564 shares of (F) FORD....  I do not currently hold and shares of (WHR), (MTL), (KO), or (PEP).

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#2) On February 25, 2010 at 11:54 PM, WiseChoice4u2 (65.81) wrote:

I totally agree.  What happened to American optimism and focus on the future. I live in Mexico and have lived overseas for 23 of the last 33 years.  I would never trade the places I have lived for the USA and the resources we have.  We are setting on a goldmine.  Bank it!  I am from Michigan.  We own a house and many acres of trees.  Michigan is one of the most beautiful resource filled states out there and it is inexpensive living presently.  I am betting on the future.  It will get a lot better.

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