Busy, busy, busy
They say you have to keep your blog updated regularly but sometimes life/business get in the way. It's been quite a market the last few weeks with the big headline issue being the Dow crossing 12,000. More significant than that is that the Dow is up more than 12% year to date while the S&P 500 is up only 9% and small caps are up over 13%.
First of all, these big round numbers are media events more than market events. But considering that the world was coming to an end 4 - 5 months ago, this performance is an eye opener and teaches much about our free (and forward looking) market system. As the market cascaded down in May, fears of rising rates, a weakening dollar, the collapsing housing market, the soon to be on the ropes consumer once their adjustable rate mortgage reset higher, geo political risks, tensions in the mid east, soaring oil prices, and finally a slowdown in the economy and earnings were dominating headlines and thought processes.
Beginning in mid July, the stock market began to march to a different drummer. I recall clearly that day as major indices were breaking to new lows for the year on big volume and then stopped. A few days later, they fell again and stopped at higher levels. I remember thinking that the bears could not be running out of strength but it was true. The market went higher, sold off slightly and went up again. This pattern continued thru the end of August. At the time, the fly in the ointment was the low volume and once traders returned from their summer vacation we would get smashed. It happened, for two days, and then the march continued but with more intensity.
This weekend's Barron's contained an interview with James Paulsen of Wells Capital Management. It is insightful, original, thought provoking, and compelling - I urge you to read it if you have not. He points out that interest rates have come down, the housing market may have bottomed (according to Alan Greenspan), job growth expanded, oil is down over 25%, and the wealth effect from the market are all contributing to a very positive environment. He continues to make a case for an expansion that could be long lasting with the US as a global powerhouse but not alone in that capacity. As he put it, we may no longer be the world leader but it's better to be the third dog on a faster sled than the lead dog on a slower sled.
While I have learned that danger lurks at every turn in the stock market, there may be far greater gains ahead of us.
Please visit our website to learn more about our firm, investment strategies, and philosophy.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.
First of all, these big round numbers are media events more than market events. But considering that the world was coming to an end 4 - 5 months ago, this performance is an eye opener and teaches much about our free (and forward looking) market system. As the market cascaded down in May, fears of rising rates, a weakening dollar, the collapsing housing market, the soon to be on the ropes consumer once their adjustable rate mortgage reset higher, geo political risks, tensions in the mid east, soaring oil prices, and finally a slowdown in the economy and earnings were dominating headlines and thought processes.
Beginning in mid July, the stock market began to march to a different drummer. I recall clearly that day as major indices were breaking to new lows for the year on big volume and then stopped. A few days later, they fell again and stopped at higher levels. I remember thinking that the bears could not be running out of strength but it was true. The market went higher, sold off slightly and went up again. This pattern continued thru the end of August. At the time, the fly in the ointment was the low volume and once traders returned from their summer vacation we would get smashed. It happened, for two days, and then the march continued but with more intensity.
This weekend's Barron's contained an interview with James Paulsen of Wells Capital Management. It is insightful, original, thought provoking, and compelling - I urge you to read it if you have not. He points out that interest rates have come down, the housing market may have bottomed (according to Alan Greenspan), job growth expanded, oil is down over 25%, and the wealth effect from the market are all contributing to a very positive environment. He continues to make a case for an expansion that could be long lasting with the US as a global powerhouse but not alone in that capacity. As he put it, we may no longer be the world leader but it's better to be the third dog on a faster sled than the lead dog on a slower sled.
While I have learned that danger lurks at every turn in the stock market, there may be far greater gains ahead of us.
Please visit our website to learn more about our firm, investment strategies, and philosophy.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.
posted by David Geller at 10:58 AM
0 comments
