I Eat Bear

First, this not not based on anything but my personal expectations. I,e, my crystal ball is, and has always been, in the shop, because it NEVER works. In it's place I have to use some logic.
No gauarantee things will work this way, but it just makes sense that they would.

First, everyone wants to know the graphic that the recovery will have. Hockey stick, "V", 'U", "W. Well, I have to describe it for you. To do that, you have to envision the trip down as something like falling off of a cliff. It was a dramatic fall, and let's say, the parchute failed to open, until very late. By some miracle, before you perished, the shoot did open, and you caught an immediate updraught. It did not take you to near the height you were, but you recovered enough to know, you need to clean your drawers. To this point, we can call it a somewhat "v" shaped recovery, but it has in fact, not recovered. And, it will not, for some time yet. But, if riding air draughts is your thing, you might understands some of the rest of this too.
While we toil between the thrill of the ride, and the need for clean drawers, and counting our blessings for still being alive, we ride to a shortened upside of the "V" recovery (about present time), and take a dip in a "U" shaped fashion. Well, since we had a great fall already, the left side of this "U" is not as great as the right side will be. And, the bottom of the "U" would last maybe 6-9 months. So, by mid-2010, we may be about where we are right now. I can clearly see the DOW to once again flirt with 9200, or lower, and I can see a Dow of 10,000 being surpassed in just over a year. Actually, expect a Dow of 11,500 or better by 2nd quarter 2011.

Ok, it get's fuzzy from here. So far, is pure REASONING. It dropped too far too quick. It recovered too quick, and adjusted. It has not accounted for one thing. TIME. In time, cost go up.
Make that stock prices go up. And to this end, I expect to see a fairly steep rise in the right side of the "U" that followed the small 'v''. By the end of 2011, I expect to see gold at near $1100 an ounce. It will be in range with the other stock price rises, and maybe even slightly less, on a percentage basis. By the end of 2011, I expect to see $90 barrel oil, consistently.

My questions come from the end of 2011 to early 2012. So let me make a definition here. A recession, is a time of hardship, for BANKS. Nothing more, nothing less. Granted, struggling economies can put tight reins on banks. I do see dips on banks throughout 2010 and 2011.
But there is a new concern by 2012. Banks are simply too far over-valued. And I see that sector getting SLAMMED. But, unlike other recessions, caused by banks, this one is different. The market as a whole, goes forward. And, by mid 2012, the Dow is tettering near 12,000. As it shakes off the damage banks try to do, by second quarter 2013, the Dow is pushing 13,500.

To do this takes some great awakening. Somewhere, somehow, people have to "wake up". Enough to realize, that if you let computers rule your life, they will. Goldman's, JP Morgan's, B of A's, Merrill's, they all have "TOYS", to ruin your world,,, forever. Hopefully, by then, people will realize, we can live without those "programs" quite adequately.

Yes, there is some financial pain in the mean time. When, and if we get past that, there is a growth side to push Dow to over 14000, by the end of 2013, with more upside potential beyond that. Dow of 16,000 not out of the question by 2015,,, if you do something to STOP the computers from ruling your world.

A computer is a tool. Nothing more. Take a serious look at a movie called "War Games", and then apply that to the market. Global Nuclear Financial War? No, thank you. How about a nice game of Chess?

I will not be easy, but we can get there. We have to put reins on some of the top players, and the market can soar.

Comments: View Comments |  Monday September 21, 2009