Great Depression Online Archive Issue:

Knowing Precisely When to Buy Stocks

Great Depression Online
Long Beach, CA
October 16, 2009

Inside This Issue You Will Discover…

*** 10,000 or Bust
*** DOW 36,000
*** Knowing Precisely When to Buy Stocks
*** And More

10,000 or Bust

“When the Dow Jones industrial average first passed 10,000, traders tossed commemorative caps and uncorked champagne,” reported AP on Wednesday.  “This time around, the feeling was more like relief.”

‘“It’s almost like an announcement that the bear market is over,’ said Arthur Hogan, chief market analyst at Jefferies & Co. in Boston.  ‘That is an eye-opener – ‘Hey, you know what, things must be getting better because the Dow is over 10,000.’”

Earnings reports from Intel and JPMorgan Chase are what propelled the DOW back up and over the 10,000 marker on Wednesday.  Intel reported a “smaller-than-expected drop in profits” and JPMorgan Chase “beat Wall Street’s expectations, reporting a profit of $3.59 billion for the July-September period.”

~~~~~~Footsteps of Marco Polo~~~~~~

Over 500 years ago, Marco Polo made his fortune just like this.  Recently Joe Kennedy used this business to make his fortune as well.  It’s one of the world’s oldest professions (no, not that one).  Now, before you start worrying that it’s too complicated, that you don’t know anything about it, or that you need to have a lot of money to get started, let me tell you, you’re wrong on all counts.  What’s more, it’s easy.

Learn more here

~~~~~~~~~~~~~~~~~~~~~~~~~

Here at the GDO we always look on the brighter side of life.  Any excuse for a celebration and we pull out our hats and whistles, act like fools, and cause a giant ruckus.  And for this occasion – DOW 10,000 – we make no exception…

So gather a stove top pot and an oversized serving spoon, and join us as we dance around and beat them silly.  It’s not everyday we see DOW 10,000. 

We’ll savor it while it lasts.  Because, perhaps we’ll see DOW 10,000 again sooner than we’d like…next time on the bust side of what will come to be known as the biggest suckers rally in history.

DOW 36,000

Sitting at DOW 10,000, and peering around, we seem to remember being here before.

“Here we are again: the same place we were March 1999, December 2003 and various points in between,” explains David Weidner at the Wall Street Journal.  

“We stand, for the first time in a long time, with the Dow Jones Industrial Average rising above 10000 – 10015.86 at Wednesday’s close to be exact -- and we are left wondering the same questions we did years ago: is it just a temporary rush higher or a new floor for the great heights to come?”

Back in 1999, the first time it happened, everyone just knew the DOW would go much, much higher.  In fact, James Glassman and Kevin Hassett even wrote a book about it.

It had the bold title, DOW 36,000, The New Strategy for Profiting From the Coming Rise in the Stock Market. 

In its introduction, Glassman and Hassett wrote that the book “will convince you of the single most important fact about stocks at the dawn of the twenty-first century: They are cheap….If you are worried about missing the market’s big move upward, you will discover that it is not too late.  Stocks are now in the midst of a one-time-only rise to much higher ground-to the neighborhood of 36,000 on the Dow Jones industrial average.”

Knowing Precisely When to Buy Stocks

Alas, we suspect some readers asked for their money back.  For the one-time-only rise to much higher ground never came…and they never had a chance to try out the strategy.  Instead, over the last decade, aside from the dollar itself, stocks have been one of the worst investments around…

“If you invested $100 in the S&P 500 at the end of the last decade, you’re happy with Dow 10000 but still hoping for a 34.5% rally before year end -- just to break even.  You’ll need a staggering 72% rally when adjusting for inflation.

“Just about everything has passed the stock market.  In 1999, crude oil was $16.44 a barrel compared to $74.80 today.  Gold was $280. It's about $1,064 today.  On the bright side, the Dow’s 13% decline looks better than the dollar, which has lost 28% of its buying power.”

Does that man stocks will never be a good investment?

Certainly not.  One day stocks will again be a great investment.  We just believe we’ll have to wait close to another decade for that day to come.  By then everyone will just know…stocks are for fools…

That’s precisely when we’ll be buying them.

Sincerely,

M.N. Gordon
Great Depression Online

P.S.  In the meantime, there is a small window of opportunity you can take advantage of… And if you do, you could be able to secure your family’s financial future forever.  Some people will take advantage of this, but most others won’t.  They’ll simply watch as the train passes them by.

Which will you be?

 

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