MARKET TIMING
Visited the library last night and read Bob Brinker's latest letter and he is now suggesting "dollar cost averaging" rather than buying the market in the low 1300's (prior advice) as this time he seems to have missed the right call (selling high 1,500's).
He is still bullish and expects the markets to trade at PE's of 16.5/17 on SPX earnings of $87 for 2008 (SPX 1457) and $97 for 2009 (SPX 1625).
He cautions that his forecast is subject to a "stabilization or decline in oil prices." He goes on with "if oil prices stop rising or decline, low short term interest rates have the potential to provide the stimulus for improved economic growth next year."
He seems focused on oil prices and gives short shrift to the financial crisis which is now the major issue facing the markets. Just try trading SKF for a day or two.
Anyhow, unlike 2000 and 2003 when he got it exactly correct he is now lowering his stops since he appears to have gotten it wrong.
posted by DAVID at
7:54 AM
1 Comments:
Thanks for the summary and analysis.
June CPI up 1.1% and June core up 0.3%
June CPI up 5.0% over June 2007, biggest gain since May 1991
CNBC says June CPI gain is biggest since 1982!
In addition to missing the bear market, Bob Brinker has been telling America inflation was low since he thinks higher priced energy is anti-inflationary since it acts as a tax on the consumer.
He was correct about it taxing the consumer which is what has economic growth under 1% and 6 months of job losses, but he was dead wrong about inflation.
High inflation.
plus
Low economic growth.
equals
Not a good time to be bullish, sadly.
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