Predictions, Hazardous and Profitable (January 23, 2010)
Readers recall two speculative entries from early 2009.
Predictions are inherently hazardous, because they're usually wrong. Publishing forecasts is an excellent way to not only imply one is an idiot, but prove the case conclusively.
Ah yes, but it's awfully good fun, so fools rush in....
Weirdly, I called the 2009 stock market rally within days of the lows.
Ian W. refreshed my memory:
Charles, you have an excellent blog. In your blog post (link & excerpt below) from March 10, 2009, you suggested the Dow could reach 10,800 and turn back down. This week, the Dow reached 10,767 and has turned sharply lower. You called the bottom and the top! Incredible!
Thank you, Ian. Now why didn't I follow my own forecast? Well, I did, but then I lost all my gains by going short too early, before the target was achieved.
Impatience is a terribly destructive trait in trading/investing. The market is not "the enemy:" the "enemy" resides within us.
You're probably thinking, "OK, Mr. Smarty-Pants, you got lucky last year. What's your forecast for 2010?"
Well, for starters: I seem to have called the top on Monday: Is The Stock Market Top In? (January 18, 2010) so that's a pretty good start.
So here is my forecast--which this year I am actually going to follow myself. As always, please read the HUGE GIANT BIG FAT DISCLAIMER below to refresh your awareness that these are the freely offered ramblings of an amateur observer, and are not investment advice.
The stock market has rolled over and will either get close to retesting its March 2009 lows (around 6,500 in the DJIA, 666 on the S&P 500) or perhaps punch through those lows to new lows (5,800 on the DJIA).
At a minimum, the DJIA will retrace to around 7,200. Since declines tend occur in shorter time-spans than rallies, I am guesing the correction will exhaust itself in March/early April.
Then a rally will begin which will run until September 2010. This prediction is based on two simple premises:
1. The party in power wants to keep that power, and will manipulate Heaven and Earth to create the illusion of prosperity because "Americans always vote their pocketbooks."
2. The majority of the stimulus money funded last year has yet to be spent. As those hundreds of billions flood the land, the illusion of prosperity will be created.
After the election in November 2010, then the wheels will fall off the games, tricks, frauds, propaganda, etc. and the U.S. economy and stock market will fall to depths few foresee.
Jeff V. recalled my speculative entry from last April, Obama's Secret Plan (April 22, 2009) and noted: Obama's Secret Plan--NOT DEAD YET!
Paul Volcker Prevails (Jan. 21, 2010) by Simon Johnson
President Barack Obama on Thursday is expected to propose new limits on the size and risk taken by the country's biggest banks, marking the administration's latest assault on Wall Street in what could mark a return -- at least in spirit -- to some of the curbs on finance put in place during the Great Depression.
Steve R. also recalled the entry:
RE: Obama's Secret Plan (April 22, 2009):
Here's the key excerpt from the April 22, 2009 entry:
I see two possibilities: either Obama really is just another standard-issue tool of the Financial Plutocracy, and Volcker resigns in disgust within a year to protect what's left of his once-sterling reputation, or Obama is giving the Banking Plutocracy all the rope it needs to hang itself. In that case Volcker is the "Trojan Horse" in the system, the one who will emerge after the extremes have finally goaded the public to an anger which cannot be diverted by propaganda and "entertainments."
What's for Dinner at Your House update: New recipe: 20-Minute Marinara Sauce
Important new article on cholesterol you really need to read:
Reader C.K., who writes as "The Healthy Skeptic," penned the article, which is well-sourced and thought-provoking. It reminds us not to accept the standard "wisdom" without submitting it to a healthy skepticism.
Where else can you get all this eclectica in one site, and for free? Such a deal!
is now open for aggregating our collective intelligence.
Of Two Minds is now available via Kindle: Of Two Minds blog-Kindle
"This guy is THE leading visionary on reality.
He routinely discusses things which no one else has talked about, yet,
turn out to be quite relevant months later."
NOTE: contributions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Or send him coins, stamps or quatloos via mail--please request P.O. Box address.
Your readership is greatly appreciated with or without a donation.
For more on this subject and a wide array of other topics, please visit
All content, HTML coding, format design, design elements and images copyright © 2010 Charles Hugh Smith, All rights reserved in all media, unless otherwise credited or noted.
I would be honored if you linked this wEssay to your site, or printed a copy for your own use.
|consulting||blog fiction/novels articles my hidden history books/films what's for dinner||home email me|