2011 - Predictions ( Financial )

Re: 2011 - Predictions ( Financial )

Postby LenaHuat » Mon Jan 17, 2011 9:42 am

This bit from CNCB:-
Duncan W. Richardson, chief equity investment officer at Eaton Vance, says that while there is a fundamental relationship between inflation and stock market valuations, current levels of inflation are so low that there is no reason to panic. “As long as inflation still hovers in the 1 to 3 percent range, that’s actually a good time for P/E multiples,” he said.

Indeed, since 1871, the market’s P/E has hovered between 17 and 18, on average, in periods when inflation has grown at an annual rate of 1 to 3 percent. That’s well above the current P/E of about 13.


This is only the 22nd month of a bull run (fr March 2009). The average bull run since WWII is 38 months. If history repeats itself, there is more upside to go in 2011.
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Re: 2011 - Predictions ( Financial )

Postby winston » Tue Jan 18, 2011 8:25 pm

Be Wary Of Rosy Outlooks For 2011 … And Profit Along The Way!
By Bryan Rich

Last year Byron Wien, the former Morgan Stanley strategist, former billion-dollar hedge fund strategist, current Vice-Chairman of Blackstone and highly touted market prognosticator predicted 2010 would be a V-shaped recovery for the U.S. economy.

He was wrong …

He expected 5 percent GDP growth for 2010. Instead we got a Fed-induced 2.5 percent.

He also predicted the 10-year yield would rise to 5.5 percent. It rose to 4 percent then fell to 2.3 percent, before rising back to the mid 3s.

He foresaw the Fed going on a major rate hiking campaign. Instead, the Fed not only held the line on its near-zero interest rates but proceeded to roll out even easier monetary policy through another big round of quantitative easing.

With more predictions about a robust Japan and a fairly stable U.S. political climate, Wien’s record for 2010 was an unimpressive 1 for 10 — he was right on a euro decline back below 1.30.

Now, for 2011, Wien offers a similar bullish growth and interest rate outlook for the U.S. economy. What’s more, he has equally bullish projections for U.S. stocks, employment, housing, global commodities and global stability in general.

Here’s a look at a few more of his key predictions:
•The crisis in Europe will be quelled again by “psychologically satisfying” policies,
•China will find it in their best interest to let the yuan appreciate, and …
•The S&P 500 will rise almost to its all-time high, gold will reach $1,600 and the dollar will be driven higher against the euro and yen from stronger growth and interest rate prospects.

But Is All This Optimism Warranted? Not According to History …

http://www.dailymarkets.com/stock/2011/ ... g-the-way/
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Re: 2011 - Predictions ( Financial )

Postby winston » Wed Jan 19, 2011 8:55 am

Worst Investment You Can Make In 2011 By Michael Lombardi

Today, in 2011, I feel totally the opposite about bonds. I think they are a terrible investment. In fact, I don’t personally own any bonds. Today, the 10-year U.S. Treasury yields 3.33%. In early October of 2010, that same 10-year U.S. Treasury was yielding 2.4%. Bond investors who bought at any time since June 2010 would face large losses on their bonds if they sold today.

If I’m right about my prediction on the future of the U.S. dollar, given the fast-paced debt accumulation of our government, interest rates will need to rise in order to attract foreigners to purchase the U.S. Treasuries we so desperately need to sell to fund the government.

If I’m right about inflation and it starts to rise unexpectedly in light of all the financial liquidity in the market place, interest rates will rise to fend off inflation.

If I’m wrong about the stock market, and in the short term to long term it continues to rise, interest rates will rise in an effort to prevent another stock market bubble.

Finally, if I’m wrong about the U.S. economy and Gross Domestic Product (GDP) starts to rise three percent to five percent per annum again, interest rates will rise to cool the economy.

Any way you look at it, interest rates, in my humble opinion, will rise more aggressively than analyst are currently predicting. And that is what makes bonds such a bad investment right now.

If we look at the stock market, the Dow Jones Industrial Average is at its highest level since June 2008. But back then, the 10-year U.S. Treasury was yielding over five percent. Based on the charts, U.S. Treasuries are well known for lagging the direction of the stock market. In other words, the prices of bonds, which are based on their yields, closely follow the direction of the stock market: up or down.

Finally, higher interest rates are not just a negative for the bond market; they are a big drag on the U.S. housing market. The more rates rise, the smaller the pool of qualified buyers for homes. And maybe that’s just what the Dow Jones U.S. Home Construction Index has been telling us—it’s still down close to 70% since 2006.

Where the Market Stands; Where it’s Headed:

The Dow Jones Industrial Average has enjoyed a tremendous January thus far, up 209 points or 1.8% on the year.

As I have been writing since late December, I expect the stock market to continue rising in the immediate term, as the bear market rally that started in March 2009 gives its final “blow off.” The Dow Jones Industrials at 12,000 is a strong possibility.

However, and as per my lead article today, rising interest rates will cap the growth of the stock market sooner rather than later. I’m turning bearish on stocks in the short to long term for a variety of reasons that I regularly write about in PROFIT CONFIDENTIAL.


http://www.dailymarkets.com/stock/2011/ ... e-in-2011/
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Re: 2011 - Predictions ( Financial )

Postby winston » Sun Jan 23, 2011 2:02 pm

Stocks Will Move Higher in First Half of 2011: Pro By: JeeYeon Park

Markets are probably due for a pullback in the near-term, but for the first half of 2011, stock are going to move higher, said Andrew Kanaly, chairman of Kanaly Trust Company.

“Earnings always have been very surprising throughout this move to the upside and we’re going to see more surprising earnings, we believe, in the first half of 2011,” Kanaly told CNBC.

Kanaly added that the Fed is “very accommodative,” which will also help the markets.

In the meantime, David Dietze, president and chief investment strategist at Point View Financial Services, said the stock market is overbought.

“Stock prices have doubled since March 2009—we’ve had a straight line up for the last four months,” he explained.

Dietze said he also sees China’s inflation rate problems an issue for the U.S. economy going forward.

“At the end of the day, just like they do here, [China’s] going to kick that can down the road and not deal with the inflationary problems until a couple years down the road—when it may be too late.”

http://www.cnbc.com/id/41173167
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Re: 2011 - Predictions ( Financial )

Postby kennynah » Mon Jan 24, 2011 12:06 am

2011...


a year of global growth and the beginning of inflation....

it is a year when major economies will contemplate reeling in the boom by increasing IR.... my suspicion...kangeroos will start the ball rolling...followed by ECB.... BoE next.... fed comes after...
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Re: 2011 - Predictions ( Financial )

Postby winston » Sat Jan 29, 2011 1:09 pm

Why 2011 Will Not Be The Easy Year Most Investors Expect
By Michael Lombardi

I’ve been writing for months about a homemade bond crisis brewing in the U.S. amid out-of-control government spending. (I don’t know why anyone would own U.S. Treasuries right now—I don’t.)

Recently I have also been warning about the municipal bond market and how defaults on debt obligations by U.S. cities, municipalities and states are a serious problem this year.

And reality is starting to hit…

New York State took control of Nassau County’s finances yesterday, as the county failed to balance its $2.6-billion budget. For those of you not familiar with Nassau County, the county is in Long Island, New York, and has a population of 1.3 million people. Forbes Magazine (2008 survey of richest counties) ranked Nassau County as the second richest county per capita in New York State.

New York, one of the financially strongest states, can take over one of its county’s finances, as it obviously has been able to deal properly with its own books at the state level. But how does a state like California proceed to take over a county that can’t balance its books, while California itself sits on a $25.0-billion-plus annual deficit? It simply won’t take the same action New York has.

On the other side of the economic picture, moving from large budget deficits to consumers, the U.S. Labor Department said yesterday that applications for jobless benefits jumped 51,000 to 454,000 claims for the week ended January 22, 2011. The spike in jobless claims surprised employment analysts, who expected claims to come in at about 400,000.

What does all this tell us?

The U.S. economy is far from out of the woods. Natural disasters such as storms and tornados leave a path of debris in their aftermath. The 2008-2009 recession has left many countries (not just the U.S.) with a plague of debt. And I don’t think most politicians realize how serious the problem has become…nor do they know how to deal with it.

The year 2011…it will not be the easy year that most investors and analysts expect.


http://www.dailymarkets.com/stock/2011/ ... rs-expect/
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Re: 2011 - Predictions ( Financial )

Postby winston » Thu Mar 24, 2011 6:09 pm

"Never make predictions, especially about the future."

Casey Stengel
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Re: 2011 - Predictions ( Financial )

Postby winston » Fri May 20, 2011 6:00 pm

"The future will be determined in part by happenings that it is impossible to foresee; it will also be influenced by trends that are now existent and observable."

Emily Greene Balch
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Re: 2011 - Predictions ( Financial )

Postby winston » Thu Jul 21, 2011 9:09 am

TOL:-

Where's the market heading ?

1) Will it be dripping downwards, with some technical rebound along the way ?

2) Will it be heading upwards, as the negative sentiment has reached it's peak and there's so much cash sitting on the sidelines ?

3) Will it be heading downwards first, with one more huge spike downwards to weed out the weak players ?

4) If an "expert" like George Soros is sitting on 70% Cash, why are you so sure, that you can beat the market ?
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Re: 2011 - Predictions ( Financial )

Postby iam802 » Thu Jul 21, 2011 10:16 am

winston wrote:TOL:-

Where's the market heading ?

...
4) If an "expert" like George Soros is sitting on 70% Cash, why are you so sure, that you can beat the market ?



Before Soros became well known as 'Soros', he didn't know he is right until the market goes in his direction as well.
1. Always wait for the setup. NO SETUP; NO TRADE

2. The trend will END but I don't know WHEN.

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