Home › Forums › Financial Markets/Economics › DOW cross 13,000, are we in a stock bubble again?
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LA_Renter.
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April 25, 2007 at 8:15 AM #8924April 25, 2007 at 8:31 AM #51069
(former)FormerSanDiegan
ParticipantThe Dow will hit 6,500 by Spring 😉
April 25, 2007 at 8:31 AM #51071HereWeGo
ParticipantEarnings are crushing estimates, especially for US companies with significant international exposure. That’s likely to power the S&P upward. If you’re all hot and bothered to buy some puts or take out a short position, I’d make sure the company shorted is entirely a US domestic operation, preferably one tied to housing in some way.
April 25, 2007 at 8:43 AM #51072The-Shoveler
ParticipantNor_LA-Temcu-SD-Guy
Riddle of the day — If your sales to Europe are flat, but you manufacture in China … Do your earnings go up ????
April 25, 2007 at 8:52 AM #51076SD Transplant
ParticipantThe answer is easy………YES EARNING WILL BE GOING UP…..because the U.S. dollar keeps falling. Hence, even if your sales in EU are flat, the currency converter takes care of “growing trend”. However, few folks, except us piggintonians will see the real reasons (e.g. $ depreciation – assuming that the company is traded in the US stock market)
So, I would NOT bet a slide of the DOW as long as the multi national corporations are part of this equation & our U.S. agenda being “continue devaluing the mighty $ to keep our debs cheap & exports up”.
There you have it…….
April 25, 2007 at 9:23 AM #51080LA_Renter
Participant& our U.S. agenda being “continue devaluing the mighty $ to keep our debs cheap & exports up”.
I really hope that is not true. There is this little thing called inflation that would more than offset any advantages of that strategy. Once the jeanie gets out of that bottle we have some real problems. But that is the way I am playing this thing. I have a 30% in international funds and my domestic stocks are tied to international growth. I have a stock plan with my company that is headquartered here in the USA but is getting exponential growth overseas. It’s a 2.5 bagger from 2005 and still going up. I have to admit I’m in the “I love looking at my 401k” mindset right now. But the weakening US dollar doesn’t sit to well with me. This is like a big shell game. Stock market goes up, dollar goes down.
April 25, 2007 at 9:29 AM #51082(former)FormerSanDiegan
Participant“I really hope that is not true. There is this little thing called inflation that would more than offset any advantages of that strategy. Once the jeanie gets out of that bottle we have some real problems.”
Those guys in the smoking room can’t be thinking that we could inflate ourselves out of our deficit problems could they ?
April 25, 2007 at 9:43 AM #51087SD Transplant
ParticipantI hear your comments loud & clear, and you both bring common sense to your replies. However, that’s the key, sometime common sense is not the “CARD” to play. Could someone explain WHY OUR VICE PRESIDENT – Dick Chenney moved/parked over $20 million outside (Swizerland I believe) about 1 year ago (it was all over the news then).
I think the regular American (and I became one too, so this is not a derogatory comment) is uninformed, unaware, and mislead in every way. I hate to bring some kind of political propaganda, BUT the poor people vote these VP’s to power……..and keeping the sheep missinformed & under control is key.
Finally, I love to see that people who bear some fiscal responability get rewarded by our Government (crack the wip in inflation). This AIN’T happening unless something major changes. I travel every year outside of the U.S. I just checked TICKET prices to Europe again for the summer (they’re almost double from historical levels)… Now: if I asked the NAR – the answer is “due to the weather”……if I asked a politician: – the answer is the REPUBLICANS…….if I asked an economist: – can’t tell because it wasn’t in the forecast….. if I asked my fellow pigginton’s: I GET A DECENT EDUCATED ANSWER ***INFLATION***
Don’t let someone fool you with inflation now is contained & only 2% year to date…… That’s for the sheep that vote for politicians, that don’t travel & don’t know what’s happening in their country……THIS IS A GLOBAL ECONOMY…COULD AMERICA WAKE UP!!!!!!!
April 25, 2007 at 10:04 AM #51089blahblahblah
ParticipantThe trap is set and most Americans are gonna be screwed big time. Our money is being devalued very rapidly, we don’t produce that many exports, and our entire way of life is dependent on imported oil. The middle east wars are a last-gasp effort to try to remain in control of a world that no longer needs the US as much as we need them to need us. The rising Dow is an illusion — with shrinking dollars the real value has been going steadily down for years but because Duh-mericans don’t understand math they think they’re making money.
April 25, 2007 at 10:19 AM #51091barnaby33
ParticipantThey are making money, so long as those rapidly de-valuing dollars buy more of the stuff they buy dollars with. Its just that excluding stuff from China, things have been getting more expensive for the last few years.
Josh
April 25, 2007 at 10:38 AM #51095Anonymous
GuestThe rising Dow is an illusion — with shrinking dollars the real value has been going steadily down for years but because Duh-mericans don’t understand math they think they’re making money.
Exactly. Check out this – the Dow graphed in currencies other than the USD:
http://www.financialsense.com/fsu/editorials/2007/0416.htmlThe illusion works for our gov’t because people don’t care/understand/pay attention to anything outside the US and our policy. “Other currencies, what are those?” The government can only mask certain rising prices, namely, imports from Asian countries since they peg their currencies to ours. Look at healthcare, food and energy and the picture becomes more clear.
If you can make some currency betting with the Dow, go for it. Just remember to turn that currency into something that will store wealth better than the dollar.
April 25, 2007 at 10:42 AM #51096Ash Housewares
ParticipantIs anyone actually surprised by the weakening dollar? It’s the easiest way to pay off our debts. Raising taxes is too politically costly, inflation is so much easier. The signs that this is the direction we are headed became crystal clear last spring when the Fed stopped reporting the M3- the broadest measure of inflation- opting to keep only the narrower measures, M2 and M1. See the link below for a clearer explanation of this than I can offer.
The key thing to remember while dollar bashing is that other countries have problems of their own. Trying to pick a strong currency for your investments is like trying to pick the slowest sinking ship.
http://articles.moneycentral.msn.com/Investing/JubaksJournal/FedKillsAKeyInflationGauge.aspx
April 25, 2007 at 12:44 PM #51110paranoid
ParticipantDow at 14000, SP500 at 1600 before the end of this summer!
Guys and gals, be prepared, and get a strategy if you have been shorting the market. don’t get crushed.April 25, 2007 at 12:57 PM #51111kewp
ParticipantI’m beginning to think that the only thing that will stop this is when folks have to start cashing out their 401k’s en masse’ to pay for skyrocketing basic commodities.
April 25, 2007 at 1:13 PM #51113SD Transplant
ParticipantThis is one more reason to see that multinational organizations/corporations will have their stock performance continue higher up…. simple math (they’re worth is reported in US dollars, BUT their wealth is measured in GLOBAL ECONIMIC “UTILS”). Hence, every time the U.S. dollar (currency) takes a dive, the price of XYZ Multinational Corporation valued in U.S. dollars goes up. The stocks charts will look great (not considering the $ depreciation & inflation).
It makes sense, if you could imagine this example. Let’s pick a hypothetical example that XYZ Corp is currently worth a whopping $10 billion in market cap. If discard their performance and look you tight their last few 2-3 years to the $ depreciation, their market cap would be 20-30% lower. This would not make sense since this is still a valuable company, and it is playing on an international arena (multinational corp). If it’s stock value wound’s go up, their competitors or investor from other countries would pick it up/buy it at the decent discount…( $ depreciation).
I guess from an investment stand point, if ONE piggintonian (with a critical eye) analyzes that REAL ESTATE is a bad future investment, vis-à-vis the Globalization, it makes perfect sense. The US isn’t growing much anymore (except the Corporations which may or may not reside here, and have an already downward trend in sales prediction per the ECONOMICAL outlook & growth for the short future 1-5 years……..you already know the reasons: the typical American is in DEBT, and maxed out his/her potential to borrow more). Corporations have little leverage & positive forecast in such markets………HENCE, it is time to move on & capture new markets (indepth the rest of the world). The stocks are leveraged by multinational corporations & US Real Estate is LOCAL (I could hear: location /location/ location). That’s an important fact, but……we’ll see the results in the next 5-10 years……..a house would be even more vulnerable due to the multinational corporations because THESE organizations could PICK UP & leave anywhere there are available & cheap resources to be utilized.
Amazingly, nobody talks about this ECONOMIC SLAVERY as a strategy for the true wealthy of this country & their Corporations. There is astonishing research & books on this subject……& I’d recommend reading it (Imagine this, I found all these articles & book reviews TRANSLATED in other languages, not English & NOT in the US…author: John Perkins). Let me give you some great books & links to open your mind to the machination of the wealthy & their continuous greed:
If you look at the currents trends, the only advantage I might see as IF the US (as a country) becomes the La Jolla / Beverly Hills of the World………. where only the true rich/wealthy are capable to survive w/out any economic impact locally & the rest……as right now we’re seeing…….are suffering more.
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