The multiple authors assert timing is impossible, but their investments probably aren't doing that hot, either.

There's nothing wrong with assessing risk and investing when the odds are good, and not swinging hard when the risks are high.

James Stack is one guru I trust. http://www.investech.com

James doesn't believe in market timing explicitly, but he does adjust portfolios to match market risk.

Today:
Dow - 11002
NASDAQ - 2162
S&P 500 - 1264

5 years ago today:
Dow - 11070
NASDAQ - 2217
S&P 500 - 1270

Wow, that's crazy.

10924.74

If I were to bet on a direction today, it wouldn't be up...

I'll take that bet. Tomorrow will be up. ;)

I can't keep track of the millions of little afflictions. I need the big picture so I can call crap as just bumps on the road. That's easy for me to say as I'm not a player in the in/out scene. The only thing that would bother me is if I saw a trend to anti free trade. I figure I'd have a long time to confirm my beliefs as it's really not on many people's radar screen especially if they are in/out guys. It'll be the invest & forget guys that would probably take the investment beating on that one imo.

I do love following all the afflictions and trying to understand the money flows. I just can't pick today's horse winner. I put $ in a Fidelity Select Tel fund then Congress allowed it's regulators to crash that market years ago. Currently Reg policy has been changing in favor of a strong Tel market but not sure if it's good enough? I was just saying to myself that Congress will quickly fix the Reg's policy because it's such an obvious situation.. like it's not hard to discover you have a flat tire. Congressmen should only be allowed hire Wall St vets when it comes to financial policy issues. If I had more brains my in/out money could have generated 25-100% over the past years instead of being ahead a little itty bitty bit.

The latest bs is that their may be a dismantling of Mutual Fund independent Chairman/whatever by Congress. The Fed Regulator, SEC/ i think, is being overturned. That's an event imo as a reflection of Congressional policy. If this works out then Congress seemed to be acting pretty quickly. Mutual fund market impact is probably the most efficent machine I can find and it's what I call great liquidity creation available to all of us.

Currently beyond what we all see financially is the elections. I'm figuring the elections is an unknown to markets. I have confidence in Fed Reserve policy management and so I may have to adjust to the possible election impact. That's what market liquidity is all about. If the progressives jam Congress & Pres just because they've won control of Sen or House something will eventuall become vulnerable. Who knows what will come up where Congress has to manage. For instance the progressive populist policy groups isn't about to allow a free market in mutual fund liquidity if they can fix it for the "common man". If the Fed Reserve says they don't need an independent Chairman that should be the end of the story.

Major world wide market and economic policy adjustments will allow a huge jump in wealth to happen. If you buy into the idea that historical growth moves exponentially then you buy into the idea of huge profits available.

If I'm correct the in/out guy will be king.

Starting to nudge the '00 peak again...

Say what?

Even with recent downturns the DOW is up 11% since this post.

Woo hoo! The future's so bright I gotta wear shades!

http://forums.pelicanparts.com/uploa...1173901794.jpg

This has more to do with some shakeout in Asia than here. Once the dust settles in Asia, the money will start flowing into the U.S.

Reports I hear are that it has more to do with the housing / lending market. Shaky loans coming back to haunt the lenders.

What did you expect after the dems took over, I called it!! When the 1st thing they come in and try do is raise taxes, take away tax relief from those who pay the most, raise the cost of small business by forcing them to start losers off at a higher wage than they are worth. The dems are out to punish those who succeed and buy votes from those who can't:mad:

What planet are you on that the 'Dems took over?' The Repubilcans hold the majority in the Senate.

:confused:

Sorry you're confused. The Congress is tied with equal numbers of Dems and Repubs right now. Tiebreaker is Cheney.

If & when Tim Johnson comes back to work, there will be a Dem majority of one.

What about Lieberman?

He's an Independent.

I think Tech is the only person on earth who thinks the Republicans retained control of the Senate...

Of course, his stance might change if something good comes out of the Senate...then it will be the Dem controlled Senate.

I fear the market is in for a big fall.

I know math is a difficult stubject for the neo-conned, but I'll try to make this simple:

Current congress consists of 49 Democrats and 49 Republicans.

Equal split, so far, right?

There are two independents. Nether independent is wholly in sync with either party. Still can be an equal split.

Take away one Democrat due to illness* (you have to be present to vote) and you have a 49/48 split favoring the Republicans. If one of either of the Independents chooses to vote with the Democrats, that evens it up again. If, in that instance, the other Independent chooses to abstain (Lieberman fails to vote about 5-6 times more often than Sanders) the tiebreaker vote goes to the President of the Senate.... Darth Cheney.

In theory, the Democrats won control of the Senate. In terms of actual, available votes, they did not.

* brain aneurysm qualifies

Not quite. He considers himself an "Independent Democrat and is identified as such.

He caucuses with the Democrats, and anyone with an objective viewpoint not pushing an agenda or trying to win an argument considers him a Democrat.

He didn't change formally change political parties from Democrat to Independent because his political viewpoints changed. Obviously.

From his Website:

"In 2006, Senator Lieberman was elected to a fourth term as an Independent, because of the strength of his record and his accomplishments for the state. He won the general election by more than 100,000 votes. He remains committed to caucusing with Senate Democrats, but will be identified as an Independent Democrat (ID-CT)."

In many military matters, he votes with the Republicans. In social issues, he votes with Democrats. I understand he defines himself as "Independent Democrat." Most Democrats I know do not consider him part of the party. I guess you would say most Democrats are 'pushing an agenda.' That's certainly how I feel about Republicans.

He's the exact same guy he was before he had to technically change labels to get back in the back door of congress.

He votes exactly the same as before. He caucuses with the Democrats. That makes him a Democrat, not an "independent."

But if you choose to believe the artifice that he is a "true independent," then so be it.

P.S. I don't think you really believe that, though. I think you're just trying to keep that argument alive so when things go terribly bad, you can say the Dems weren't in control.

I choose to believe that he is not the kind of person I want in the Democratic Party. I sent money to Ned Lamont's campaign.

That's fine, but the truth remains, the Dems control both houses.

Lieberman considers himself a part of the Democratic Caucus, and the Democratic Caucus considers Lieberman a part of them.

If Cheney has to come in and break a tie vote within the next few weeks, I promise not to say 'I told you so.'

LOL. Some of you guys are going to think this next observation is wacko. If you stopped short of a conclusion and used this as an opportunity to learn something, then you would learn something. Aw heck, that's not gonna happen. Here goes:

You guys think "independent democrat" is an oxymoron. Because emotionally, you have to demonize the liberals. And you like to think of Republicans and the whole "freedom" lie as an example of rugged individualism. That's funny. The Republican agenda is narrow, fellas. That's why we call it "conservatism." The Democratic Party's biggest problem is its widely diverse platform. Yes, this includes the wackos you guys love to caricaturize. In fact it includes a WIDE range of ideas. The Republican Party definitely has this advantage, and I have seen both parties deal consciously with this Democratic weakness. The Republican Party is FAR more linear and narrow. That makes the R Party more efficient. There is little dissention. Democrats have a terrible time just agreeing on an agenda.

Again, most of you guys are going to dismiss this out of hand. But maybe, perhaps, somebody......will take a closer look at what, at least in my State Capitol, is a universally recognized political fact. The Republican Party has more discipline. The Democratic Party is WAY more diverse. That's the weakness that Rove has so effectively exploited.

In the future, when I see someone conclude that the Republican Party is where we see the wide diversity of opinions, I'm going to know who's not paying attention.

I think the market is proceeding cautiously--reflecting mixed demand for investing. It doesn't take much for a pullback, as we have seen recently. Fear is always the major factor in pullbacks--anything that generates fear. And, unfortunately, the media is good at hyping fear, which somehow figures into its ratings game.

Low interest rates will continue to spur the market, because that's a good investment climate. I believe the Iraq war drain and the deficit spending have hurt the market and investors' confidence. That big push upward a few years back when Clinton balanced the budget reflected a very bullish attitude about the future. The demand for stocks climbed out of sight. Then, Greenspan lowered the boom on interest rates, and the "irrationally exuberant" market deflated. It recovered again when he dropped interest rates sharply when Bush took office. But the bullish attitude that prevailed prior to 2000, when the budget was balanced, has not returned because of 9/11, Iraq and big budget deficits.

With the need to reduce carbon emissions and foreign oil dependency, I believe the handwriting is on the wall for oil and the Middle East. Big changes are coming soon, no matter who becomes President. It will be recognized as a national security issue. Right now, Iraq is preventing the politicians from focussing on more important issues, but it will happen eventually. It is probably already happening in corporate boardrooms and higher political circles.

A bit of cart beforet he horse.

The budget was balanced during the Clinton years largely through capital gains taxes from the booming stock market. The stock market did not boom because of a balanced budget.

The fact is that the stockmarket does not require a balanced budget to do well because, by and large, the Federal balance sheet is independent from the many corporate balance sheets that make up share trading companies.

That the market does not need a balanced budget is empirically demonstrated by performance of the last 5 years, which has generally been upward.The budget has never been balanced during that time. Ditto during the Reagan years and the stock market rise then.

Finally, Greenspan did not "lower the boom" on the stock market. Greenspan made his famed "irrational exhuberence" statement in 1996... a full 4 years before the 2000 decline of the market. His interest rate moves also preceded the collapse substantially. But given the incredibly high tech P/Es of the time, I doubt anyone could ever justify them, regardless of the interest rate. They were indeed, quite irrational.

I agree with your statements on carbon emissions.

Supe, the Democrats can be incredibly narrow-minded and unified on certain issues. For example, if you are black, hispanic, gay, a union member, a woman, work for a university, a lawyer, poor, a civil servant, or a victim, you are supposed to vote Democratic because this is the party that represents you. Nevermind that you can be black and rich, or a woman and the head of a corporation. They like to latch on to one characteristic and define you by it, then tell you that you are one of them because of it. Reminds me of the joke about Democratic diversity: it's a black liberal, a jewish liberal, and a white liberal all saying the same thing. Further, Democrats seem to feel that members of these groups are disloyal if they do not vote Democratic. It's almost as if they are saying: "Look at all I've given to you and you don't return the favor by voting for me! You ungrateful little...."

But the fact is, many issues Republicans are homogenous on, Democrats are divided on, and vice versa. It makes each party appear to be a "big tent" to its members and the opposition to be a united threat.

Don't think so. Balanced budgets boomed the market, reflecting consumers' confidence in the future. It wasn't the market that balanced the budget. Stocks are worth what people are willing to pay. Strictly supply and demand.

I'm an investor and was a daily market watcher during this period. The market took a hit when Greenspan said irrational exuberance--and it was shortly before he started raising interest rates--stating he was concerned about inflation--which didn't exist. The market took a hit every time he raised the rates, and it was the summer of 2000 before the elections. That big anti-trust case against Microsoft at the time was also a killer for tech stocks. It cast the whole computers future into question.

Capital investment collapsed when Greenspan raised rates, and growth funds still haven't come back that well, after eight years. The main movers have been small to mid company value stocks.

When Bush took office, Greenspan lowered interest rates 4 times in Jan 01 (!), as soon as Bush was inaugurated; the Microsoft anti-trust suit was settled, and the market slowly rebounded. But the average American had to live with 1% CDs for years, which more than offset those tax cuts. I know it cost me.

Some people think Greenspan killed the market to get Bush elected. Books have been written about it. I think he may have been more concerned about the market being overvalued. And I think he just did it again recently, with his statement about a possible recession in 07. That aggravated the U.S. market at a time when there had just been a foreign correction.

Greenspan doesn't like the market to get ahead of itself. He believes that stock prices should be tied to company fundamentals. I believe stock prices also reflect the confidence of the investor in the future. If things look good to them, they will pay more. In that sense, he may have been right this time: the market is doing fairly well considering the current state of affairs.

Getting the budget under control was a factor in the boom.

The budget being out of control is a factor in our current inability to regain and sustain the trajectory of the 90s.

Wrong.

We had capital streaming in from Asia after the financial crisis. There was more capital going around then sensible places to put it...right when the internet was taking off. Money has since flooded into real estate. It will chase some other fad in the near future.

Balanced Budget, never happened, it was a projected budget, it was never done., President Clinton using Enron accounting to get the numbers he wanted. You can adjust the numbers in your check book, projecting future income to balance it, but that doesn't that it is actually balanced if it isn't there.

I also, like most people, was an investor and daily watcher during that time period.

Here is the chart of the NASDAQ. I don't see any "hits " of any sizable proportion either in 1996 when Greenspan made his irrational exhuberence speech in Dec of 06....not really until 2000 when the market started to collapse.

http://forums.pelicanparts.com/uploa...1174045062.jpg


If you were a day trader perhaps the smalll downward blips seemed like cliffs, but for the average investor during the 1990's it was all one big upswing. In fact if you got out of the market when Greenspan made his famed IE speech in 1996, you would have lost out big, because the market hasn't dipped below that point in the 10 years since.

I concur that the stock market, like any market is driven by supply and demand. And interest rates factor into that demand by driving a competitive demand for bonds or debt financed investments. However, they are just one factor. Other elements like companies actually delivering earnings weigh even heavier in stock valuation. Unfortunately, most of the earnings of the internet boom didn't pan out and cheap money provided by the Fed wasn't going to change that.

A balanced budget, again, empirically doesn't seem to have played much of a party in any stock market boom of the 20th century.

A logarithimic chart is good if your agenda is understating the market peaks.

http://forums.pelicanparts.com/uploa...1174055087.jpg

I'll correct myself a bit here: Greenspan uttered his irrational exuberance in a Dec. 96 speech, which dropped the market a couple of points the next day, and foreign markets a bit more. There was some surprise at the time at the impact of his remarks. The market rebounded and continued to climb.

His interest rate hikes occurred before the elections during 2000, and were attributed to inflation concerns. It was about the time Bill Gates was getting harrassed by the Justice Dept on anti-trust. The combination killed the market--especially tech stocks(NASDAQ). That's reflected in the charts others have shown here.

It has taken the market 8 years to get back to those prior levels, and tech isn't there yet by a longshot. A lot of people lost a lot of money on NASDAQ. Were stocks overvalued? Greenspan thought so. And he continues to influence the market with his words lately--mostly negative.

As best I can see, interest rates haven't correlated with inflation since the 1980s or early 90s. What's inflationary is the cost of energy (oil). Raising interest rates just kills the housing market, investment and the stock market--and so impacts the economy. Bush and the Fed Chairman know that by now.

What's keeping inflation down is made in China and low food costs. You can't tamper with the China situation (e.g., raising RMB value or tariffs) without creating inflation. Walmart has become too important for the average American.

my market newsletter just now advised to buy when S&P is under 1380



and as far as I'm concerned inflation is a risk. And I don't think the Dems will succeed in cramping free trade or I'd be beating feet soon.