Hi Guys,
It’s been a tough opening month for 2014.
As Ted’s posts have highlighted, a poor start statistically results in muted returns for the remainder of the year. But be of stout heart; although returns are likely to be muted, the historical record supports a 30 % probability of positive rewards.
Although the yellow warning flag signals have been raised, many market researchers remain steadfastly optimistic with positive projections. Jeremy Siegel of “Stocks for the Long Run” fame and InvesTech’s Jim Stack are solidly in that camp.
Professor Siegel is admittedly an optimistic soul, but not a committed perma-bull. He was recently interviewed on a Knowledge@Wharton session. Here is the Link to that 16 minute discussion:
http://knowledge.wharton.upenn.edu/article/jeremy-siegel-on-why-stocks-are-and-will-remain-the-best-bet/Siegel observes that “There’s a lot of scare stories about what’s going to happen.” Siegel offers an alternate opinion that mitigates the fear factors.
Forecasting is a hazardous business.
John Kenneth Galbraith has a wicked way with words. He offers a cautionary alert with several of his quotes that seem appropriate here. He is famous for his observation that “The only function of economic forecasting is to make astrology look respectable” and “In economics, the majority is always wrong”. Given these yellow flag warnings, please visit and enjoy the Siegel interview.
The prolific editor and writer H.L. Mencken also proffered an insightful and pity quote that captured the dangers about market forecasting. He said: " For every complex problem there is an answer that is clear, simple, and wrong”. He too had a wicked way with words.
Regardless of these acerbic quotes from writers who are celebrated for their sarcastic wit, many economic factors support professor Siegel’s prediction. Let’s hope he is prescient with this call.
Unfortunately, access to Jim Stack’s keen market analyses is limited. Here is the Link to his website:
http://www.investech.com/Stack’s charts-of-the-week are accessible on this introductory page. Like Siegel, he is optimistic about 2014 equity rewards. Many of his Indicators parallel those of Professor Siegel and some are his own invention. Stack is not always right on his projections, but he is always honest and fairly examines the overarching data. Today, he is guardedly cautious about a positive equity return this year.
A few days ago, Jim Stack made a presentation on the MoneyShow website. You will need to signup to gain access to his current forecast. For what it’s worth, here is the generic Link to the current MoneyShow video presentations:
http://www.moneyshow.com/main.asp?scode=013413I trust both these market experts. You all decide for yourself.
Best Regards.
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Regards,
Ted