ECRI: Economic Forecast Remains Near All Time Low 18 comments
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According to the U.S. Weekly Leading Index (US WLI) released on 12/26/08 published by Economic Cycle Research Institute (ECRI), the economy remains near the low point in the cycle. Lakshman Achuthan of ECRI states:
With WLI growth barely above its all-time low seen two weeks ago, the U.S. recession will persist in the months ahead.
The US WLI has a slight lead over business cycles.
As a leading indicator, the WLI is demonstrating that economic conditions in the future are going to be worse than they are today.
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US WLI? How is it derived? What actually does it track? The link above does not explain it. Does it portend of a downturn in the economy or does it just indicate that it has happened? It is no surprise we are in a recession. It has been talked about by many for a long time. Almost a year. What would be interesting would be to watch when it starts to go up, as it looks like all the upswings were pretty significant.
Again after the small stock crash in the summer of 1983, if you had bought small stocks, you'd be so rich you would not be reading this today.
After the 1987 crash, the S&P and the NASDAQ are up almost three-hundred percent. Find me another investment that topped that.
Gold? Bah!
Silver? Bah!
Real Estate? Bah!
How about the Dow? Even if you had bought into the DOW when the most hated of modern presidents took office in 2000, you would be fat today.
There are unheard of buys out there today. Research them. Buy companies with lots of cash and free cash flow, and little debt. You'll be happy in a few years.
I asked a similar question which the author answered in a comment for a previous article: seekingalpha.com/artic...
Artful Dodger - - -
1. There are some unheard buys out there, but also some dogs. I'll quote the most important thing you said: "Research them."
2. Your memory has failed you. On inauguration day 1/23/2001, the Dow closed at 10575.8, 2000 points higher than today.
Yes, Warren Buffet, started buying with his" Personal funds" in Oct.2008, after the Oct. crash. But, only after the crash! You want go back and check his investment history?
One thing cut my eye. Someone checked and found out, before the crash, all his" Personal funds" was safely stashed all in treasuries, etc. None in stocks. Bingo.
Stocks, or any business, do have cycles. Neglect this fact at your own peril.
If I remember correctly of his words: "Be fearful, when everyone else are brave. Be brave, when everyone else are fearful".
On Dec 28 08:22 AM ArtfulDodger wrote:
> After over forty years experience let me tell young and new investors
> this: After the crash of 74, the media warned everyone never to invest
> in stocks again. However, you could have bought into the DOW at around
> 500 several times; even after a forty percent crash, it's 8500 today.
>
>
> Again after the small stock crash in the summer of 1983, if you had
> bought small stocks, you'd be so rich you would not be reading this
> today.
>
> After the 1987 crash, the S&P and the NASDAQ are up almost three-hundred
> percent. Find me another investment that topped that.
>
> Gold? Bah!
> Silver? Bah!
> Real Estate? Bah!
>
> How about the Dow? Even if you had bought into the DOW when the most
> hated of modern presidents took office in 2000, you would be fat
> today.
>
> There are unheard of buys out there today. Research them. Buy companies
> with lots of cash and free cash flow, and little debt. You'll be
> happy in a few years.
Unemployment averaged around 14% from 1937-41 which is just a little higher than the average unemployment rate from 1994 to the present which was around 12%, when measured the same way it was in 1937-41.
For some reason the word 'hobo' is more romantic than the word 'homeless' but they are the same people, suffering the same hardships.
while this is useful, you need to describe how it relates to market performance. While we are clearly only at the start of the real economic effects of the recession, is it a good time to buy? You need to clarify the usefulness of this information.
Current fiscal & monetary policy measures in play are sufficient to expand the Economy from its current Severe Recession by 2009Q3, regardless of the Obama stimulus pkg. The dramatically lower energy prices are equivalent to approx 3% of Fed Rate reduction.
the markets do what the markets do. the WLI is one tool you can use to make informed decisions. this index looks forward two quarters to show economic growth.
this recession is consumer driven. the 2001 recession was investment driven. in a consumer driven recession, you can assume the future earnings of companies will fall. they will be different from company to company (compare wal-mart to macy's).
watch what is happening today, and think 6 months from now economic conditions will get worse. Obviously, the index does a good job of predicting a recession, and if you are one who believes history repeats itself - approx 6 months before the end of a recession the market goes up. i personally believe in this particular recession demographic shifts will constrain recovery. anyway, as an investor it is your call.
i believe the best investment strategy today is to protect your assets.
steven hansen
1) My house is worth over 300% more than I paid for it in 1987(Marin County CA)Was worth over 400% in 2005.
2)The Dow is now lower than it was in 2000
3) it took the stock market 26 years after 1929 to get back to where it was before that crash.
4)No guarantee that any previous company with lots of cash and free cash flow and no debt will still be that way after this depression ends.
Do you expect all here to follow your advice and perhaps have to wait 26 years to get back to where we were a year ago?
BEST advice to follow when investing in stocks: "Give up the bottom 20% and the top 20% and keep the middle 60%". That way, almost all gains are kept and all losses are controlled so you never get killed in markets like that of today. Live to successfully invest again by controlling your greed. Wish everyone thought like that.
On Dec 28 08:22 AM ArtfulDodger wrote:
> After over forty years experience let me tell young and new investors
> this: After the crash of 74, the media warned everyone never to invest
> in stocks again. However, you could have bought into the DOW at around
> 500 several times; even after a forty percent crash, it's 8500 today.
>
>
> Again after the small stock crash in the summer of 1983, if you had
> bought small stocks, you'd be so rich you would not be reading this
> today.
>
> After the 1987 crash, the S&P and the NASDAQ are up almost three-hundred
> percent. Find me another investment that topped that.
>
> Gold? Bah!
> Silver? Bah!
> Real Estate? Bah!
>
> How about the Dow? Even if you had bought into the DOW when the most
> hated of modern presidents took office in 2000, you would be fat
> today.
>
> There are unheard of buys out there today. Research them. Buy companies
> with lots of cash and free cash flow, and little debt. You'll be
> happy in a few years.
40 years is HALF a generation and just enough to get suckered in and think that we can never see a 90% drop in the stock market. The stock market IS a great way to invest but not until we are out of this SECULAR BEAR MARKET, and that may be a few more years and we may well see Dow 2,000 before then. If that's the case you will have to gain 700% just to get back to even, at 14,000.
If you must be in this market then continue to dollar cost average in no matter how scary it seems and when things eventually turn up you will do much better than using a simple buy-and-hold strategy.
Hope does not replace wisdom and good, hard data.
--Fred
"The world is not ending, just the world as you know it"
Good advice!
Bull make money, bears make money, hogs get slaughtered.
Wrong!
This recession started while the sonsumer was storng and healthy. It began because of excesses that were exposed and that are systemic all throughout our economy, especially among consumers. The consumer problems are just now coming to light and will take years to correct as consumers scrimp and save and pay off debt. Many of them are closing in on retirement age and will never put their money in the stock market again or will be pulling out what they have left in the market.
Those aging boomers will now become a drag on our economy, feeding the deflationary cycle and burdening taxpayers.
--Fred
"The world is not coming to an end, just the world as you know it"
On Dec 29 05:00 PM freddyv wrote:
> 40 years is HALF a generation
The statistics have been compiled based on information provided by 12,000 corporate executives throughout the world. A system of rating the banking systems of individual countries was conducted by participants answering a number of questions and rating the banks on a scale of one to seven, one being in need of government support seven being entirely healthy.
Canada’s baking system, lead by Royal bank, CIBC, Scotiabank, TD Bank, Bank of Montreal and National Bank, received the highest rank in the world, scoring 6.8 on the rating scale.
The top 10 safest countries for banking are currently as follows:
Canada (6.8)
Sweden (6.7)
Luxembourg (6.7)
Australia (6.7)
Denmark (6.7)
Netherlands (6.7)
Belgium (6.6)
New Zealand (6.6)
Ireland (6.6)
Malta (6.6)