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| + | == Why I'm Sticking By Dow 55,001 == | ||
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| + | <html>Yes, I realize that sounds crazy. But just bear with me for a minute, and I'll show you how the big index will get there. | ||
| + | , I made a prediction that stocks were due for significant upside. Twelve months and nearly 20% later for stocks, few of those key factors have actually changed. From a sentiment standpoint,[http://www.fu08.cn/plus/view.php?aid=112500 <span style="font-weight: bold">Magic Johnsons departure could assist ESPN&</span>], investors still hate stocks -- and by and large,[http://philipcareaids.org/Involve.html <strong>Denver Broncos Jerseys Wholesale</strong>], retail investors don't own them in meaningful numbers. | ||
| + | A perfect example of that comes from Fidelity. The fund management powerhouse is a great proxy for what the retail investor is doing with his money. Years ago,[http://amath.unist.ac.kr/wiki/index.php/%EC%82%AC%EC%9A%A9%EC%9E%90:Fjvbyzpn4#Kliff_Kingsbury_puts_an_ad_in_Texas_Tech.E2.80.99s_school_news <span style="font-weight: bold">Kliff Kingsbury puts an ad in Texas Tech’s school news</span>], the biggest fund at Fidelity was the Magellan Fund, a stock fund. In today's post-2008 world, it's a $120 billion cash reserves fund. | ||
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| + | To quote Wellington Management's Frank Teixeira: "People are protecting their investments from an event that's already happened." | ||
| + | Yes, we've had a historic rally in the years since the market bottomed in March 2009,[http://metrorailindia.com/nba-jerseys.html <strong>cheap nba basketball jerseys</strong>], but that rally hasn't been supported by buying pressure from Joe Pubic. Instead, it's been propped up by a combination of structural factors and institutional necessity. But as the data from Fidelity show,[http://metrorailindia.com/nba-jerseys.html <strong>nba jerseys</strong>], there's still a lot of money sitting on the sidelines in retail investors' accounts ready to move into stocks when stocks come back into favor. | ||
| + | A New Cycle Begins | ||
| + | None of this is new -- we've seen it before. There are some striking similarities between the period we're in right now and the market conditions of the late 1940s and the early 1980s. History may not repeat, but it certainly rhymes. | ||
| + | After the Great Depression, stocks fell out of favor for retail investors for a full decade as people protected themselves from a crash that had already taken place. The discount rate dropped to near where it is now in the years that followed, and stocks quadrupled in the decade after that. In the late 1970s, stocks fell out of favor again at the heels of the Oil Crisis, prompting BusinessWeek's infamous "Death of Equities" cover in 1979. Stocks more than doubled by the decade after that, and more than tripled by the mid-1990s.</html> | ||

