13,000 - now what?

Maybe.  Who knows?

I would like to see a nasty little correction in here somewhere, just to flush the chumps and remind the do-it-yourselfers and market gurus that one should never confuse brains with a bull market.

I think we’ll see 12 first.  It’s getting a little too easy to make money, and the folks on CNBC are just too darn happy.

Put your question a little differently, do you think there is 7% upside. I would have to think so, given all the indicators. Core inflation is under control, corporate earnings are consistently exceeding expectations, taxes are low. Yeah I would be comfortable with a Dow @ 14000 by the end of the year or mid 08 at the latest. Even if hits 12 first its still a small percentage to hit 14. Now if the S&P can continue its bull run, we all will should be very happy, let alone CNBC.

[quote=Philo Kvetch]

Maybe.  Who knows?

I would like to see a nasty little correction in here somewhere, just to flush the chumps and remind the do-it-yourselfers and market gurus that one should never confuse brains with a bull market.

[/quote]

I think we had that earlier this year. I'm saying 14,000, no 12,000 between here and there.

I would say a pull back soon. All the IRA money hitting in the spring has pushed the market up.

We are due for a slight pull back.

INMO!

Continued run up in the US averages for the next 2 months or so, perhaps 4-6%... Then a slew of potential 2Q earnings preannouncements to the downside and the markets will give back those gains. Followed by a strong final 5-6 months of the market, with the majors finishing about 9% higher for the year...

In that time frame, the Mets will have won the World Series and all is good with the world...

Who cares?

Might be the first time I agree with Bobby Hull



If you are asking just to make conversation, cool by me.  Lay any
statistics out there you want, but nobody knows 12 or 14 first,
lol.  And I am not trying to sound prude, but I hope none of my
clients are with me because I think I know what the market is ever
going to do.

I reckon that’s true. On the other hand, Modern Portfolio Theory ( asset allocation) has an active component that allows for anticipated market performance. Has anyone else here been trimming portfolios back a little into more fixed positions as we enjoy running with the bulls?

[quote=Greenbacks]

I would say a pull back soon. All the IRA money hitting in the spring has pushed the market up.

We are due for a slight pull back.

INMO!

[/quote]

Yep.  I'm sure that is it.  All those $4,000 or less traditional/Roth IRA and those SEP contributions are driving the market to never before seen heights.  That has to be it.  Maybe from now on, we should only invest January thru April and be in cash the rest of the year.

[quote=theironhorse]Might be the first time I agree with Bobby Hull

If you are asking just to make conversation, cool by me.  Lay any statistics out there you want, but nobody knows 12 or 14 first, lol.  And I am not trying to sound prude, but I hope none of my clients are with me because I think I know what the market is ever going to do.
[/quote]

I doubt anyone here is focused on the short term or trying to predict what the market will do short term. However, we are paid by our clients to have an informed opinion. Your clients hope you know what to do about the market in which we find ourselves. To take advantage of or protect them from that market.

"However, we are paid by our clients to have an informed opinion."

EXACTLY. To pound your chest claiming to not care about what direction the market is heading, and not having a somewhat educated opinion makes you look like a monkey...

"Who cares?" Well, alot of people care to have an idea or an opinion. It amazes me that such idiots are allowed to hold a license in this business...

Well, here's my nickel...

I see NOTHING like I saw in the fall 1999/spring 2000.  I vividly recall feeling uneasy about the market, but also afraid not to participate at all in it.  While I had several years experience in investing for trust portfolios (which by their nature are pretty conservative), I was pretty new to the retail game and very concerned about blowing up a bunch of clients and losing my reputation before it was built.  Because of my background, and my fear, I almost completely avoided internet stocks.  I recall selling Munder Net-Net to exactly one client on an unsolicited basis.  I remember telling a client who was gung-ho to buy Cisco at $78/share, that I had some near-term concerns due to valuation, although I felt like the company was a fine one long-term (I still feel like that client blamed me for his poor decision...he sure didn't follow me when I left the bank!)

My clients and I participated in the market, although we lagged behind since I was using a lot of value stocks, American & Franklin funds.  I don't consider myself a value-hound, although I probably lean that way.  I was simply afraid of the stratospheric P/E ratios on all the growth/internet/tech stocks.  I remember having a difficult time convincing a prospect to roll his IRA into American Balanced Fund, which had just turned in a stellar 3-4% return in 1999.  His friend was telling him to call Janus and avoid paying "all those broker charges".  The prospect, only because he knew me and my family, reluctantly decided to roll his IRA to me.  You all know the history for the three years after that.  My client made money, while his Janus-loving buddy lost 70% of his rollover and ultimately bailed at the bottom.

The bottom line is, sure, all sorts of folks are finally waking up and loving stocks after missing the first four years of this run, but I don't think we're done just yet.  P/E ratios are about half what they were in spring 2000.  Earnings are slowing a bit, but the tank doesn't look out of gas just yet and I think 14,000 before the end of 2007 is very reachable.  Is it possible that we'll get a shake-out correction before then?  You bet it is.  At the same time, if you're going purely off valuation, it looks MUCH less threatening than it did in early 2000.  Despite what historians would have you to believe, there were PLENTY of people concerned about high valuations seven years ago.  Unfortunately, they were being mostly drowned out by people like a Putnam manager I remember listening to (who sounded like he was about 23) who said...and this is pretty close to verbatim..."I think that a 20,000 Dow in 2005 is pretty much a slam dunk.  Think about it...all we have to do is average a 12% return between now and then and we're there."  I can't speak for everyone who heard that commentary, but sirens were going off in my head!  I just wish I'd kept that CD...

Seven years later, the value/growth roles are reversed.  Large-cap growth looks relatively cheap when compared to traditional value stocks.  While I haven't abandoned value stocks, I've certainly been overweighting large cap growth for about the last six months.  If we are paid to manage money for clients, we will earn our keep when, for example, the Dow drops almost 500 points in one session and/or drops 10% or more between statements and the clients begin to call looking for advice and reassurance.  It's not fun work...I did a lot of it in 2000-2002...but if you survive a prolonged bear like that, you have a new perspective (no pun intended) on the market and you pretty much know that you can survive anything (short of a depression)thrown at you.

I'm no Abby Joseph Cohen and I can't tell you which number we'll see first, but I'm a long-term bull.  I personally don't know any long-term bears who have survived in this business.  Certainly, they won't make more money for their clients than a good bullish advisor.  I don't expect a big pullback until we are considerably closer to the 2008 election, but I'll be at least somewhat positioned if we do...Lord help us if we elect Hillary...

"However, we are paid by our clients to have an informed opinion."

EXACTLY. To pound your chest claiming to not care about what direction the market is heading, and not having a somewhat educated opinion makes you look like a monkey...

"Who cares?" Well, alot of people care to have an idea or an opinion. It amazes me that such idiots are allowed to hold a license in this business...

Nice try.  I have an opinion on what the market is going to do, but I am an idiot if I try to move my clients around based on that opinion.  Any of you reps who do are kidding yourselves into thinking you might know something more than anyone else, which you don't.  What amazes me about the industry is those who think they can even remotely correctly predict the market, EVER!  Of course I have an opinion, which is why I prefaced my remarks by saying if it was being asked for discussion, fine.  But if you think you have clients and will retain them for your "knowledge" about the market, try again.

[quote=theironhorse]

“However, we are paid by our clients to have an informed opinion.”

EXACTLY. To pound your chest claiming to not care about what

direction the market is heading, and not having a somewhat educated

opinion makes you look like a monkey…

“Who cares?” Well, alot of people care to have an idea or an

opinion. It amazes me that such idiots are allowed to hold a license in

this business…

Nice try. I have an opinion on what the market is going to do,

but I am an idiot if I try to move my clients around based on that

opinion. Any of you reps who do are kidding yourselves into

thinking you might know something more than anyone else, which you

don’t. What amazes me about the industry is those who think they

can even remotely correctly predict the market, EVER! Of course I

have an opinion, which is why I prefaced my remarks by saying if it was

being asked for discussion, fine. But if you think you have

clients and will retain them for your “knowledge” about the market, try

again.

Just remember this is a market of stocks not a stock market. I know that

when I feel giddy its time to sell and when I feel lousy its time

to buy. I loaded up on Apple before the close, lucky me. Since I’ve been

called a “Fan Boy” I won’t get into it.



Right now, I’m tightening my stops. But if they continue to run, I won’t

stand in the way. I’ve been known to let stocks run up 700%.



“Sell in May and go away, don’t return until Labor Day”. Summer is for

enjoying yourself so I don’t take it too seriously and keep higher levels of

cash.



Back in October/November I suggested biotechs and its worked out so

far.



Biggest winner this year is TTEC +60%. I got sick and tired of speaking to

someone in Bombay India when I had a question about my phone bill/

cable bill/credit card.



Why is it you never buy enough of the good ones?

Amen!



We took some pretty good positions in GS around 110, and the stops finally

caught us at 207. Not a bad run though. As you said Skee, wish we had

gone heavier!

You are missing my point I believe.  Of course I know more than my
clients.  More than many reps, and less than some others. 
But I firmly believe you are kidding yourself if you think you can make
(even educated) guesses as to the market, and change your clients
portfolio throughout the year and be correct.



Bankrep1-this will sound sarcastic, but why are you here and not a
household name or something if you can predict the market? 



Maybe I am too much a believer in Nick Murray, but I try to attract and
retain clients based on the relationship.  There will ALWAYS be
someone who knows more than you.

Nice call....is anyone suprised at that swoon break through 12k around 2/27 to where we are now?  I sure as hell am...The bears had barely a few days to enjoy the party (or cover).  Bankrep I'm sure wasn't so feeling so confident at 12k got sliced around 60 days ago...  This should get interesting from here imho...

That new tag line doesn't cut it though.  Please give us your OCT 07 prediction.  The board needs you in predictor mode.  Congrats...
[/quote]

Ironhorse,

If you read Dow 12,000 or Dow 13,000 posts you will see I accurately predicted the market. This is when "guru's" like Bill gross were calling for a crash on CNBC, and most on this board laughed at my first prediction. My second prediction was accurate down to the month.

I 100% agree that no is right all of the time. If you're financially educated, you should be able to make educated decisions for your clients who might not be. If you're not confident you know more than your clients go back to the books, you have much more to learn.[/quote]

No prediction here. I don’t anticipate…I participate.

[quote=Indyone]

Well, here's my nickel...

I see NOTHING like I saw in the fall 1999/spring 2000.  I vividly recall feeling uneasy about the market, but also afraid not to participate at all in it.  While I had several years experience in investing for trust portfolios (which by their nature are pretty conservative), I was pretty new to the retail game and very concerned about blowing up a bunch of clients and losing my reputation before it was built.  Because of my background, and my fear, I almost completely avoided internet stocks.  I recall selling Munder Net-Net to exactly one client on an unsolicited basis.  I remember telling a client who was gung-ho to buy Cisco at $78/share, that I had some near-term concerns due to valuation, although I felt like the company was a fine one long-term (I still feel like that client blamed me for his poor decision...he sure didn't follow me when I left the bank!)

My clients and I participated in the market, although we lagged behind since I was using a lot of value stocks, American & Franklin funds.  I don't consider myself a value-hound, although I probably lean that way.  I was simply afraid of the stratospheric P/E ratios on all the growth/internet/tech stocks.  I remember having a difficult time convincing a prospect to roll his IRA into American Balanced Fund, which had just turned in a stellar 3-4% return in 1999.  His friend was telling him to call Janus and avoid paying "all those broker charges".  The prospect, only because he knew me and my family, reluctantly decided to roll his IRA to me.  You all know the history for the three years after that.  My client made money, while his Janus-loving buddy lost 70% of his rollover and ultimately bailed at the bottom.

The bottom line is, sure, all sorts of folks are finally waking up and loving stocks after missing the first four years of this run, but I don't think we're done just yet.  P/E ratios are about half what they were in spring 2000.  Earnings are slowing a bit, but the tank doesn't look out of gas just yet and I think 14,000 before the end of 2007 is very reachable.  Is it possible that we'll get a shake-out correction before then?  You bet it is.  At the same time, if you're going purely off valuation, it looks MUCH less threatening than it did in early 2000.  Despite what historians would have you to believe, there were PLENTY of people concerned about high valuations seven years ago.  Unfortunately, they were being mostly drowned out by people like a Putnam manager I remember listening to (who sounded like he was about 23) who said...and this is pretty close to verbatim..."I think that a 20,000 Dow in 2005 is pretty much a slam dunk.  Think about it...all we have to do is average a 12% return between now and then and we're there."  I can't speak for everyone who heard that commentary, but sirens were going off in my head!  I just wish I'd kept that CD...

Seven years later, the value/growth roles are reversed.  Large-cap growth looks relatively cheap when compared to traditional value stocks.  While I haven't abandoned value stocks, I've certainly been overweighting large cap growth for about the last six months.  If we are paid to manage money for clients, we will earn our keep when, for example, the Dow drops almost 500 points in one session and/or drops 10% or more between statements and the clients begin to call looking for advice and reassurance.  It's not fun work...I did a lot of it in 2000-2002...but if you survive a prolonged bear like that, you have a new perspective (no pun intended) on the market and you pretty much know that you can survive anything (short of a depression)thrown at you.

I'm no Abby Joseph Cohen and I can't tell you which number we'll see first, but I'm a long-term bull.  I personally don't know any long-term bears who have survived in this business.  Certainly, they won't make more money for their clients than a good bullish advisor.  I don't expect a big pullback until we are considerably closer to the 2008 election, but I'll be at least somewhat positioned if we do...Lord help us if we elect Hillary...

[/quote]

Why did I post this topic?  It's posts like this.  I do NOT try and predict the market for my clients. However, I do like to hear what other reps are thinking.  I even like to listen to Dr. Bob (DWS). But, I don't actually put my clients in a 90% Int'l, 10% REIT & Commodities allocation like he suggested.  But, I still find him interesting.

There are some wise reps on this board, and the more they talk, the more I learn.

I think there is an issue that everyone is ignoring right now that relates to the long term health and stability of the market, and the subprime mortgage crisis is a result of this problem, not the cause of it.  2005 and 2006 mark the only the third and fourth time in history that consumer debt was higher than consumer savings.  The first and second time that that has happened was in 1932 and 1933, for entirely different reasons than todays problem. 

We now enter a time where company profits are continuing to grow, spending has increased steadily for a long time, but most of it (as the subprime market has shown) is being done on credit.  How long will it be before there is a backlash against those people (a growing majority) that have far overextended their debt to point that they can't spend anymore.  I'm guessing that the housing market is the first backlash of this sort (which makes sense because it is one of the highest personal expenses).  How long before this same thing happens across every other part of the market? 

I would guess that no matter where the market goes in the next one or two years, we need to be prepared for consumer spending to go in the tank sometime in the next ten years, and that may become a long term problem until consumer education improves in this country and credit companies are held accountable for the way they take advantage of consumers.  Just my two sense, I'm not really sure that it will change my recommendations right now, but I try to make my clients prepared for both the increase and decline in the market.

Bteam, totally agree, for me, this is the big lesson learned around the turn of the century runup and plunge. Except the socio political stakes are much higher now, everywhere you look.

And for my model, this has meant tucking in some gains as we go alone. If I could teach myself back then from now, I would be saying, don't sit here and tell your clients we are just going to ride this thing up and down. Better to be taking a little off the table, if partly just to let them know you are paying attention and anticipating volatility.

The best time to prospect for new clients is by referral from your happy campers, in a down market.

That new tag line doesn’t cut it though.

[quote=skeedaddy2] [quote=Rugby]

That new tag line doesn’t cut it

though.

[quote=skeedaddy2] [quote=Rugby]

That new tag line doesn’t cut it

though.

I don’t know why that posted twice, but that’s an observation that does bear

repeating!

There is a wild card tossed in here by name of Bernecki (or something like it).

Alan Greenspan didn't do George H Bush any great favors with interest rates going into his re-election. IIRC he was down right intrusive during the Clinton Re-El. paul Volker absolutely doomed Carter (the guy who appointed him).

We don't know where Bernecki will be for this cycle. I think there are going to be a lot of eyes on him too. Those eyes will vote with their bonds if they don't like what they see. This could well be the kind of shocks that takes the pins out from under this market.

This having been said (in true economist fashion, I happen to have one right here) On The Other Hand! It seems to me that we are not as far ahead in this market as we think we are. This market is seeing a lot of water go under it, but we're paddling upstream against a dollar that is going downstream. The market going up is us staying in the same place (relative to world wealth). Actually, I think we're net losing wealth when you figure it against earnings and assets as opposed to just asset value.

The good news of that is that the domestic companies are  becoming cheaper and cheaper relative to foreign corporations. Eventually this  will make for a climate ripe for International takeovers. Intl Tako's will be bullish for the dollar (which will fuel more takeovers and the dynamo of capital will take effect).

I do feel a little cheapened by this. Sort of South American, if you know what I mean. 

Bernanke, I believe.

I do feel a little cheapened by this. Sort of South American, if you know what I mean. 

Except, this is really the principle that is underpinning our sustained success. Is it the old world where the Carter economics (stagflation) you fear flourished, or a newly globalized economy, albeit a more fragile one, interdependent to the point where growth outside the U.S. itself is enough to keep the party going, and the U.S. manages to contribute enough to maintain a reasonable amount of consumption? Of course, economic cycles don't disappear, but the South America syndrome is avoided. Who knows? Look at the wealth that has been amassed here so far, and a revitalized energy industry, for example, perhaps through incentives, dare we say, could act as the next engine, combined with basic freedom and innovation in services development, rolled out to the world via the internet. We always seem to find a way.

“Tower to Philo. You’re clear to land on runway 1-9er!”

[quote=skeedaddy2] “Tower to Philo. You’re clear to land on runway

1-9er!” [/quote]



“Roger Wing Leader.”

http://forums.registeredrep.com/forum_posts.asp?TID=4385&amp ;PN=1&TPN=4

Translation of JoeCamel's Post?

"This won't do! What's the matter with you?"

"All it takes is faith and trust.."

"Ah and something I forgot... Dust!"

"DUST?"

"Just a little sprinkle of Angel Dust! On you cigarette!"

"The world'll go to heck, but you won't even notice!"

 Brevity, man, a link instead of a quote.

Is angel dust really still around? What about paraquat?

Judging by the last 24 hour history of American politics, you're going to get your shot at command and control economics, including the opportunity to undue the " baaad" effects of globalization. Never mind that the run in the Dow (42% of these companies profits are now coming from overseas) is powered by a rising tide for all. Humanity is heck, the human condition, that I agree  .