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In this economy, the DOW is currently priced in my opinion about 10,000 points too high. With the way things are looking now, the Dow should be hovering somewhere in the 1,000-3,000 range bottoming out below 1,000 sometime in the next couple of years before slowly recovering throughout the remainder of the decade. This recession is just getting started and investors seem to be having a party for some unknown reason. Reminds me of 1929 when the fundamentals of the economy were very weak (hints of recession began to creep in as early as 1928), but yet the stock market kept going up and up. In my opinion we will see a crash sometime this year that makes 2008 look like just a small preview. Look to go from 10,000 to 4,000 in a matter of days as unemployment tops 15% nationwide (and broader unemployment including those who have given up and the underemployed around 25%). Stock up on canned food, guns, ammunition, etc, and run for the hills. Its gonna get BAD!
lol its no where near the end of the world yet.
Your claim as everyone else has said is baseless unless u just wanted to shout out ur opinion and have everyone talk about it.
But i do have to say that I do not really get this rally the market has had how it keeps making new highs over and over again. While I do see a correction I dont see the end of the world.
Shall everyone get into the rally at this price due to stimulus going in? Though I started investing in early 2010, I do not want to buy at these prices....dumb money.
Since the stock market is the only real way to build any wealth for most people in this country, I would welcome a drop to 1000. That means the wealthy would be selling off huge chunks of their investment portfolios, which would give average joe a better chance to get in the game, and redistribute the money the wealthy are sitting on when they trickle back in to the market.
Is there any real chance of this? No.
1. There are far too many mutual funds that are heavily invested in long term stock positions. They also have fund strategies to have X invested in X stocks, so they must continuously pick up shares with the new capital they receive. Many of these funds are bankrolled every payday by the American worker. They will not just sit on that cash, even if the market looks a little sour.
2. Investment analysis mathematics and technology have evolved far too much for the market to bottom out quickly. Large trading houses will scoop up huge positions in stocks the minute they feel they are undervalued, this will create a floor that is much higher then "1000". The Dow companies are way too strong as a group to ever sink that far without widespread underlying disruption in the economy. If you think companies like Intel, IBM, Kraft, Microsoft, Walmart or Coca Cola are going any where any time soon, I certainly have a broken bridge to sell you.
Once they dumped the auto industry and AIG from the Dow calcuations it was easy to make it go up.
The dow isn't a good indicator for the health of the country. It only shows wall street (the priviledged elite) is making lots of cash.
But if you hunker down in your spam bunker you will miss the spring. Go smell some flowers and lay in the grass. The world is still here and isn't gonna evaporate overnight.
Your post is completely baseless and without factual evidence to prove your standpoint. Reminds you of 1929 huh? So what, are you like 94 years old?
Return to this page in a year, where I can ridicule you some more for being wrong.
LMAO. The dow jones is used as the barometer on where we are on the recovery since unemployment stats take months to get. Plus, I dont see many poor people investing money. This is rich people becoming richer. I'm not rich but I invested some money last year, I'm getting 25% return. If I didnt purchase a home last year, I would've invested 5 times more than I did.
Imagine those which can invest tens of thousands? Now is the time to make real money but you have to have money to make money.
The DOW jones means nothing, it is driven by sentiment which may have no connection to reality (and it usually doesn't). People feel the worst is behind us so they buy. The DOW can fall just as fast as it has risen and it has infact happened that way in the past. There is a lot of deleveraging still to take place, the red ink has all been put on the backburner for a bit... a lot of corporate bonds going bad and 2nd wave of foreclosures about to hit.
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