I'd *love* to buy into this. If I could just turn the care of my 401(k) and other investments over to some Dow fund and not have to monitor my stocks so closely in the future, it would be SUCH a relief!
Unfortunately, I can't. I just don't find the arguments in this article very compelling.
For instance, when the author says that FORWARD P/Es are really low on quality stocks, I immediately become skeptical. "But those are only guesses!" I think. "Screw the forward P/Es. What about current P/Es?" Oh. The author doesn't want to talk about THEM. Probably for good reason.
Another reason is . . . major demographic changes? What does THAT mean? That says NOTHING.
Corporate profits are at their highest levels ever. Uh, okay. That's old news, already factored into the prices of stocks - which, by the way, are lofty. It also suggests that profits are more likely to FALL from here. And it suggests that inflation has impacted profits. Big deal. I hear that the few Zimbabwe corporations that have any profits are breaking records EVERY DAY! Heh.
Anyway... here are the ten reasons:
June 2, 2011
Ten reasons markets are set to soar
Dow 20,000, here we come
By James Altucher
NEW YORK (MarketWatch) — The market fell like a brick on Wednesday. People can’t handle any piece of bad news without saying “this is the big one.” We have visceral memories of May through July 2010, just a year ago. We have visceral memories of 2008, when it seemed like no end was in sight. Nobody wants to be caught trying to catch that knife with their mouths like in a circus act. You get cut up that way, and the blood isn’t pretty.
But it’s not going to happen. Even God took one day to rest. The market every now and then needs a day or two to rest. Maybe even more than a day or two. But over the next 12 to 18 months I expect to see Dow 20,000 /quotes/comstock/10w!i:dji/delayed DJIA -2.22% .
Here are some reasons:
1) QE2 has not started. WHAT? You might say? I thought not only has it started last November, it’s about to end? Not true at all. Federal stimulus takes 6 to 18 months before even one dollar hits the U.S. economy in a meaningful way. So expect that $600 billion or more to start hitting toward the end of 2011.
Rest of article: http://www.marketwatch.com/story/next-stop-dow-20000-2011-06-02?dist=beforebell
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