John Lounsbury

Wall Street Breakfast: Must-Know News

Correction: not "quide" but "guide".

Wall Street Breakfast: Must-Know News

Rachael -

Your "bear market bounce" comment is very correct. We will rally (rather than bounce) when investors start to regain confidence in corporate balance sheets and anticipate that the bottom of the recession is within six months. Neither is close at this time. There is strong support in the DJIA 7100 - 7300 area (7286.77 bottom on 10/9/2008 and 7161.15 bottom on 10/27/1997). If we go below 7000 on the Dow, there is no quide to where the bottom will be, because the next chart support is at 2365.1 (bottom of 10/11/1990). Collapse of markets to 1990 lows can only happen in the event of a depression that would not be called "The Great Depression", but would be "The Greatest Depression".

I think that fiscal and monetary policy will succeed in preventing "The Greatest Depression". Thus, nominal DJIA in the 2000's is very unlikely. However, if we ultimately inflate our way out of the trough, how low will the Dow go in inflation adjusted terms?

The Case Against Investing in the Dow Industrials (For Now)

You could have made the 14,164.53 high on 10/9/2007 as the end of the growth cycle. It is true that the NASDAQ and S&P 500 showed their last top in early 2000, but you indicated you were discussing the DJIA.

That being said, very stimulating article.

Five American Innovators to Buy During the Current Downturn

GripperDon - - - Please observe the warning and keep writing (cleaned up stuff). You are addressing important imbalances in our business system. We have evolved into a welfare society for the poor and a welfare society for the rich and powerful, supported by the 70-80% in the middle. The middle will keep stretching until it breaks if we do not find a way to improve things. We have government policies that protect the entrenched interests and do not encourage entreprenures sufficiently. One might argue that deregulation of the finacial sector was done to encourage financial entreprenureship, but I would argue that it simply created space for the established financial system to create fraud.

How about a system that allows inventions to compete for funding based on merit rather than on the basis of how little they will disturb the establishment. I worked most of my career in a large international corporation and saw it do great damage to itself and society because the leaders chose to protect their vested interests rather than accept and promote new technology that eventually proved to be world changing. Unfortunately, this happens all too often.

Wall Street Breakfast: Must-Know News

Another vote for "Under the Radar News".