Posted on 10/10/2008 6:52:10 AM PDT by disraeligears
Caveat: None of the following is to be relied upon by anyone for anything. Anyother words, I have no idea what is going to happen in the financial markets, and if anyone tries to tell you differently, they are a bloody fool!!!
That said, before going to law school, I was a stockbroker (I know, I know, next it is selling used cars). I remember looking at my Quotron in 87 and seeing the Dow drop 25% in one day!
Never paid much mind to the charts (was always zeroed in on fundamentals).... BUT, recently, when I looked at the Dow over the past 12 years or so, support looked to be at around the 7600 level (July 2002).
Then I looked at the Dow since around 1935. Using my old ruler and drawing a line throught the market accretion since then (1935), it looks like the DOW would naturally be around 6000 if not for the past activity of 20 years or so.
Any ideas?
mods, please change title to 6000... thanks
Why? Could happen....
Have to be careful extrapolating linear trends over long time horizons. Stocks tend to follow an exponential growth pattern - compounding and whatnot. Perfectly natural and reasonable for them to do so.
Or run for office! Looks like a 20 yr credit bubble is the real deal...Greenspan ain't so smart after all. Then again, a lot of ppl got rich during that span.
Market is coming up.
The market is overswold, panic sellers.
Linear growth curves are very good at finding bubbles. I use them regularly as a market research analyst (chemicals, not stocks). There has been a lot of baby boomer money driving the stock market over the last 20 years, which I believe created a stock market bubble. If you take that out of the equation, your 6000 number could be right.
I’m guesssing (betting) the bottom will be around 7700. I’m no pro, by any means, just what I’ve pulled together from MANY different opinions.
Well,
I predicted 8k for the bottom when it was around 12.... Now that was long term prediction, not this short term rapid drop. Keep in mind folks, you have a natural drop right now being enhanced by further manipulations in the economy by folks like Soros.. Once the election is over, those manipulations will stop, regardless of who wins.
They dow will not freefall forever, it may continue to trend down, but its not going to keep dropping 500+ points a day indefinately. Many of the companies being dragged down by this fear rally are quite stable companies that are benefiting immensely from the broader downturn and cleanup.
I think the end bottom for the dow may be lower than my original prediction months ago at this point, but I don’t believe its the “END OF THE WORLD”. Look for value and for companies that do something that do well when money is tight. Or perform consistently even in bad times. There have been a LOT of boring companies that have been ignored because there were more exciting plays... most of those will still be standing and be stronger than ever when this mess clears out.
Different companies with different earnings potential operating in different political climates having very different alternative investments.
But sure, go ahead and draw the line and compare 80 years ago.
Glen Back said to buy extra food...
Sorry to hear you are planning to become a lawyer. If your mother doesn't know yet and you can play the piano you can always use the time honored lie about being employed in a "house of ill repute".
People will be jumping out windows and off bridges if DOW goes below 7000..............
When do we step in to catch a falling knife?
I hope that idiot Cramer wasn't one of them.......
The post depression era in the stock markets extended all the way to 1953 or so.
Start your line there.
If you look at current and historical P/E’s 6000 is not a bad guess. If your understand that some of the E’s will further drop because of a lot of debt that will default, 4000 may not be such a bad guess. We have been through a galactic sized global financial bubble.
LOL, yeah, but he gets no more weight than the fact I broke a boot lace today, and that’s a bad luck signal.
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