Back in the studio for the regular appearance with Kudlow tonite, at 5:00 – 5:25pm.
The topics will be Dow Rally, The Economy, Sentiment, and Earnings. Guests include the erudite Stephan Abrahms (Trust Company of the West), the insaneley bullish J.J. Burns (of the eponymously named firm), and my latest contrary indicator, Joe Battapaglia (Ryan Beck & Company).
A few random thoughts about this market:
• The Narrowness of the rally continues:
ice All time high Date of high Recent high % off all time high Dow 11,750.28 (1/31/00) 11647.69 0.25% Tran 5,013.67 (5/31/06) 4433.34 11.57% SPX 1,552.87 (3/31/00) 1333.7 14.11% Nasdaq 5,132.52 (3/31/00) 2258.3 56.00% NDX 100 4,816.35 (3/31/00) 1656.07 65.62% Russell 784.62 5/31/2006 729.94 6.97%
• The Dow has only 10
stocks above their January 2000 highs, and of those 10, four are responsible
for dragging the index higher – Boeing, United Technology, Altria and Caterpillar.
• Despite the recent move towards big cap and tech, be aware of the pundits who have been advising you of this for the past 5 years have
been very, very wrong. (We made the suggestion to shift to big caps over the summer). The Nasdaq 100,
for example, is still down an eye-popping 65% from its 2000 highs.
• The 3 bullet points above are why most investors are not
feeling like they are at 6 year highs; Unless they hold only Dow stocks – or the
4 mentioned above – most investors portfolios remain far below their 2000 peaks.
• Cash has outperformed the Dow since January 2000; Even
considering reinvested dividends; cash STILL out performs the Dow.
• The Dow’s Real (inflation adjusted) performance, even with dividends reinvested, is significantly below breakeven.
• Lastly, see this for Why the 1994 Goldilocks scenario is so unlikely.
Should be a gas . . .
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