Ibid
I rarely do this, but honestly, I have nothing to add. Today the market might as well have been closed. Nothing new to report, no new charts to show, no change of opinion. Just look at yesterday's post.......it's chock full of charts!
In lieu of that, enjoy a blast from the 70s.......it's Jean Jean the Dancing Machine!
4 comments:
volvosan and pb - yes both very valid comments. Unfortunately as each day goes by and the DJA holds well above 12000, the confidence to buy continues to grow in the belief that only new highs will be the test and not past lows. illogical, yes and based on human greed etc. however we do need to bear in mind the lack of a real return on the DJA compared with its previous high spell 5 years ago. In order to have provide a real return since then based on the previous high of 11700ish, today it would need to be nearer to 15000. So looking at the DJA purely as an investment engine that over time always has an inflation beating rate of return, at todays level it is way under performing and has much potential to go higher. Its only when we introduce economic and political reality, that we say the current level is far far too high. But at present those buyers are only looking at the DJA as an INVESTMENT ENGINE WITH A RATE OF RETURN THAT HAS A POTENTAIL TO GO MUCH HIGHER IN ORDER TO MERELY PERFORM IN LINE, NEVER MIND ABOUT OUT PERFORMING.
This rally today is failing ........ it is fading. I'm interested to see what happens this afternoon- this isn't the same overbearing rally we are used to......
gonna grab some more gold eagles on the pull back. Miners are cheap,jump on lets ride. Whats a girl ta do?
TRADER
OK, the point I was making was not a prediction on the DJA, but was a comment on how something can be measured in a completely different way by people. We see the DJA and the other indices as way overpriced, because we are linking their performance to the economy now, and in our opinion it just doesnt stack up. We want a fall to bring the indices down to a level we can relate to. On the other hand, the bulls see this current level as something they can relate to and any falls make it cheap and worth buying in their opinions. Now, if their sense of worth is comparing today with the last peak in 2001 they are seeing that it hasnt kept pace to a sustainable average. Traced back to its beginningsthe DJA has over the long termed proved one of the best forms of investment. But during the recent past its fallen behind its rate of return and would need to be nearer to 15000 to get back on track, if you take the last 5 years as being an acceptable period of measure for that analysis. So all i was suggesting is that based on this view of a valuation the DJA is good value and worth buying in a bulls eye. Heck Im a bear, but we must all try and get to know the enemy!!
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