Calls For A Market Ready to "Rocket Higher"

Mark Hulbert wrote late Thursday night:

Richard Band is not someone who makes outlandish predictions just to get headlines.

So I sat up and took notice earlier this week when he wrote to subscribers of his Profitable Investing newsletter that the stock market was ready to "rocket higher" in an "uptrend that could carry the blue chip indexes to all-time highs by late 2008 or early 2009. Dow 16,000 here we come!"

Morningstar wrote in its latest market outlook delivered Thursday: "If you compare stock prices to underlying business value, stocks are cheaper now than at any time since 2002."

Last weekend's Barron's included a discussion with James Finucane, a 67-year-old stock strategist who worked for years at Stifel, Nicolaus in Chicago but now labors as a consultant in West Lafayette, Indiana.

Mr. Finucane specializes in calling market lows, and he believes we're making one now. "In fact," wrote Jonathan Laing, "he foresees an explosive rally, with the Dow rocketing to 18,000 to 20,000 within a year from its current 12,361. The climb, he says, might begin imminently or take a few months of backing and filling before the market takes off."

Mr. Finucane says that "governments and central banks have a clear incentive to promote growth, so to bet on a prolonged slump is to bet against the government, markets and human nature."

He's further encouraged by the enormous build-up of cash on the sidelines. "Money-market cash, for example, has soared to $3.45 trillion, versus $2.2 trillion at the market low in March 2003," wrote Mr. Laing. "And U.S. domestic equity funds have seen a record nine consecutive months of net outflows, a skein that probably will hit 10 months when the Investment Company Institute releases its February numbers. The previous record was eight months, following the 1987 stock-market crash."

Act accordingly.

Comments

[Bill W.:]

Jason, you really need to get out more often!

2008 Mar 31 10:39 AM

[Robster:]

well the author has sold me. I'm off to buy right away with this fundamentally stirring article. Pity the author didn't tell both sides of the story based on facts rather than hunches and then make a conclusion - i may have been convinced.

2008 Mar 31 11:50 AM

[kahunabear:]

Cash on sidelines?
Stocks are cheap?
Don't fight the fed?

Move along, nothing new here. Been hearing this since Dow 14,000.

Got anything new to say?

2008 Mar 31 12:30 PM

[gordon:]

Barron's also tried to move money into stocks by bashing commodities this weekend, classic manipulation. Earnings are dropping, every stock has to rise beyond the Dollar's FALL, to be positive, we'll see if the Dollar holds 70. I'm not holding my breath. Windowdressing of portfolios is going on even on the last day of the quarter, without any SEC watching, what the h they say, let's see the rest of the week.

2008 Mar 31 12:33 PM

[RedRiver:]

Hmmmmm, if everything since 2001 has been in the bubble (values, home prices,profits, potential earnings, etc.) then what does "if you compare stock prices to underlying business value, stocks are cheaper now than at anytime since 2002" really mean?

Must mean that they are still over priced or, it means Nothing.

2008 Mar 31 01:26 PM

[NoFate:]

Usually the person who writes the article is not the troll, but in this case I think you are.

Sure, we hit a bottom ...and subprime is contained ...and the rest of the world will decouple ...and earnings will rebound in H2 ...and if you click your heels together 3 times the economy will fix itself!

Nice job Jason ...any credibility you did have is now gone.

2008 Apr 01 03:56 AM

[Aquater:]

The market has rocketed up on Tuesday, making fools of the bears above. But we will see if it holds up. Anything may happen, but nobody is going to ring a bell at the bottom, especially not the bears who will keep looking for Dow 10000 and, if they get it. they will look for Dow 7000 and so on till they fall flat on their face. If Jason or other bulls did not say anything new, the bears too had nothing new to add. Market at some point discounts the bad news, and nobody knows when that is. You always have to take risk.

2008 Apr 01 04:17 PM

[mythoughts:]

Jason, you have a problem with reality. you really should take a vacation from your "work" and come back in 2011.

2008 Apr 01 06:48 PM

[nyka:]

Jason is merely citing alleged gurus; he himself is not doing the predicting. Nevertheless, being a bear at this point is utterly foolish. The market jumped today (Tuesday) and pity the poor doomsayers as they watch a rapid-fire escalation of prices in the immediate days ahead.

2008 Apr 01 06:53 PM

[pochovilla:]

I am convinced the guy is a bear if he thinks only 16000 on the Dow. Why not 25000? and P/E's of 30+ if only the FED buys all of the "paper" and leverage goes to 60. Doesn't GOOG @ $1000 sound nice too?

2008 Apr 01 07:24 PM

[Kunst:]

"the Dow rocketing to 18,000 to 20,000 within a year"

Right. See you on April Fool's Day 2009.

2008 Apr 02 01:09 AM

[fodi MD.:]

IT IS INTRISTING ,YOUR PREDICTION OF A SKYROCKETING STOCK MARKERT I am reminded of a country in Africa whos stock market skyroketed because currency deflalion was so severe that everyone spent their money on stocks before the currency became whorthles.

2008 Apr 02 01:27 AM

[Bhakta:]

Nice try, but I cannot see it. Yes, the FED and the US TREAS are manipulating the markets and they want them to go up, not down. But, are they going to give each of us $1 million cash, to go out and buy ourselves news toys with? Doubtful. 70% of the economy is consumer spending and the consumer, that means ME, is stretched too thin already. I'm not Bear Stears, too big fail!

2008 Apr 02 03:15 AM