Tack

Four Reasons We're Headed Even Higher

Artful:

One of the most well-reasoned and best-presented pieces of logic I have encountered in the "sensitivity group" that is otherwise known as SeekingAlpha.


On Aug 29 12:53 PM ArtfulDodger wrote:

> JS and Fellow Investors:
>
> I personally don’t spend five minutes a year trying to figure out
> which way markets are going and don’t really relate to doing it.
> I don’t really care either—for the most part. Crashes such as we
> saw last year are few and far apart; as a rule they simply don’t
> come piling on top of each other.
>
> As I’ve written before on this site, I was once a very foolish boy
> (now I’m a foolish man), and back in the 1980s when the CBOT began
> futures trading on indices, I jumped in thinking I could predict
> the day to day machinations of markets. After only a few days I realized
> my vew was fallacious. I continued to trade for about four years,
> but never again grew the hubris to think I could predict market direction.
>
>
> Therefore, I don’t usually read articles that predict market direction,
> but there are so very many negative articles on this site that I
> decided to read this positive one.
>
> I will say that Mr. Schwarz’s points are valid, especially this one:
> The DOW was around 8400 when Geithner came stumbling out of the blocks
> and Obama was strafing the economy every time he wagged his tongue.
> The DOW dropped 2000 points before Geithner could find his tongue
> and Clinton told Obama to nix the negativity—this was indeed a move
> that had nothing to do with the economy or business. That 2000 point
> move was thus no more a move back to normalcy.
>
> That said, let me also say that at this point the majority of stocks
> I’ve checked out recently do not fit my criteria for buying—but I’m
> a picky, tight son-of-a-batch. So because I can’t find something
> to buy doesn’t mean there’s a crash coming.
>
> I am invested mostly in China and Brazil, with only a few US companies
> in my coop. The problem I see with most businesses in the states
> is too much debt. This came about in my view mainly because of high
> corporate taxes—which
> are not going down.
>
> Some companies are indeed working their debt down. Others, such as
> GE, have added massive amounts of new liability to their books. This
> is why GE’s boss, Jeffrey Immelt, is pushing for a bailout of sorts—urging
> the government to pass the Cap & Trade Bill which will strongly
> benefit GE.
>
> Three of the US companies I own, GD, FWLT, and FLR have stable long-term
> contracts that guarantee them gracious earnings for years out from
> here. Shareholders should be well rewarded, in my view.
>
> The other two, JCOM and GRMN, have pristine balance sheets, keep
> bringing the bacon home to momma year after year, and have products
> and/or services with potential world growth.
>
> I have reasonable profits in all of these, but I’m not selling them,
> shorting them, or putting stops in on them—not matter what anyone
> says, unless there is drastic monetary or fiscal policy change.<br/>
>
> I urge investors (particularly new and young ones) to learn to search
> and find companies of this type, buy them when they’re down (or out
> of favor), and give them a chance to make you some money.
>
> You’ll be much the better off doing this than trying to pick market
> direction.
>
> Thank you for this article, JS, and your work.