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Contest #2: Stupidest Excuse for a Stock Market Rally

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  • Contest #2: Stupidest Excuse for a Stock Market Rally

    Stupidest Excuse for a Stock Market Rally Contest

    With such a rich assortment of lame analysis in the financial press, we're certain our forum members can find a truly idiotic, mind-numbingly stupid explanation for the current Dow rally.

    The contest is open for submissions from October 5, 2006 to the end of the month or the end of the rally, whichever comes first. Then we'll put the submissions to a vote of forum members. The winner receives a signed copy of americasbubbleeconomy–or, if the winner already has the book, a silver dollar–plus a title promotion on the iTulip forums to Omnipotent Poobah.

    Good luck!
    Last edited by FRED; 10-05-06, 06:16 PM.
    Ed.

  • #2
    Re: Contest #2: Stupidest Excuse for a Stock Market Rally

    The number of booyah's heard on Cramer's show hit a new all time high last week - doesn't everybody know that that's the real reason?

    I did hear a rumor on the internet that Maria Bartiromo was going to change her hair style though. I've been watching so I know when to sell.
    http://www.NowAndTheFuture.com

    Comment


    • #3
      Re: Contest #2: Stupidest Excuse for a Stock Market Rally

      so intimidating, I mean... where the hell do you start?

      ok, let's do a google search...

      oops. did a google news search and this is the first to come up...

      Comment


      • #4
        Re: Contest #2: Stupidest Excuse for a Stock Market Rally

        Originally posted by Fred
        Stupidest Excuse for a Stock Market Rally Contest

        With such a rich assortment of lame analysis in the financial press, we're certain our forum members can find a truly idiotic, mind-numbingly stupid explanation for the current Dow rally.
        I'm not against fun or contests; however, I would find it of much more value to read what our members think may have actually accounted for rather decent moves since the SPX and DJI lows on 6/13/06 => up 10.59% and 10.84% respectively through 10/5/06, and Nasdaq, NDX, and RUT lows on 7/21/06 => up 14.14%, 16.38%, and 10.59% respectively to 10/5. To me these are all very decent short-term gains--had I any one of them for the year it would be much better than I have actually fared so far.

        All totaled I know little about economics and all the deep issues that get discussed on this board; if I know anything about anything it is more of a technical aspect in trying to look at markets' behaviors mainly using widely availabe data and charting. Being as I have rather had my ass kicked by the markets over the last 19 weeks, I was looking back at some indicators tonight that seem quite apparent now as having been good long entry points--all of which I psyched myself out of acting upon because of acceptance of conventional wisdom, e.g. lows in October of 2nd presidential year, etc. I did not act upon some buy signals on 6/29 and 6/30 of two generally good indicators, nor on another indicator with buy signals on 6/15, 6/29, 7/19. Any of those would have netted me some gains had I been long. And the reason I have not gone long I feel was my attitude about what the markets ought to be doing--and that was my opinion they shoud not be going up. Well so much for that tripe.

        I keep McClellan oscillators using WSJ data for NYSE and Nasdaq, and these are a bit different from the data I believe that is used for $NYSI (ratio adjusted) Mc Oscillator and $NASI (ratio adjusted) Mc Oscillator for Nasdaq available on stockcharts.com. Both my oscillators (not ratio adjusted) have summation breakouts from downtrends that go back to about 6/03. These alone suggests to me that perhaps these markets may run up for a while--despite whatever "stupid excuses" behind the moves up. However a lot of index charts appear quite positive for the moment.

        It is still too fresh on my mind of how the markets moved up in 1999 into 2000, and I believe it may have been back in 1996, when Greenspan uttered "irrational exuberance" and that was an early call if there ever was one. Who is to say all the irrational exuberance has been "cleansed" from those who play in our markets? Perhaps it is irrational exuberance over rate hikes being stopped, and oil going down--whatever the reason the most bullish thing the markets can do is go up, and that is what they have been doing and appear to me inclined to continue a while.

        jk, recalled to me a few days ago a Keynes quotation which I expect was on these fora somewhere: Markets can remain irrational longer than you may remain solvent, or something to that effect.
        Jim 69 y/o

        "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

        Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

        Good judgement comes from experience; experience comes from bad judgement. Unknown.

        Comment


        • #5
          Re: Contest #2: Stupidest Excuse for a Stock Market Rally

          I think I have the winner here (cross posting to the bull thread on the general forum)

          http://www.thestreet.com/_yahoo/news...&cm_ite=NA

          Note the bolded portion at the end..

          Dow 16,000 in '07

          By James Altucher
          RealMoney.com Contributor
          12/7/2006 10:38 AM EST
          Click here for more stories by James Altucher

          The Dow Jones Industrial Average has been largely pathetic so far this century. The newspapers will mention all-time highs, but it's only part of the story.

          The Dow has been mostly propelled by just a handful of stocks, notably Altria (MO - commentary - Cramer's Take - Rating) (up 237% since Jan. 1, 2000) and Exxon (XOM - commentary - Cramer's Take - Rating) (up 120% since then).

          But most of the Dow components are still in the severe bear market that started in 2000, despite doubling profits across the board, doubling book value, improving margins and a severe decline in interest rates since then. Price-to-earnings ratios have contracted, despite the increasing earnings stability and the decline in long-term interest rates (which historically has a great effect on P/E ratios).

          Twenty of the Dow components are down in the 21st century, many of them in bear market territory (declines greater than 20%) that they have yet to come out of. I do not believe this bull market could "get tired," as many pundits say, until these quality companies climb out of the cellar.

          Let's take a look at five Dow components and consider the prospect that their shares might finally break out -- that is, catch up to their improving fundamentals -- in 2007.

          Microsoft (MSFT - commentary - Cramer's Take - Rating), for instance, has seen a drastic decline despite improving every metric in its business. The company is on the precipice of having a blockbuster year in 2007.

          Yet the stock is down 45% since the beginning the 21st century, even as book value has gone from $2.78 in the year ended June 1999 to $3.99 now. Price-to-book has plunged to 5.85 from 16. The P/E ratio has gone from 50 to 20.

          The market is giving zero credit for the fact that the only profit centers at Microsoft -- Office and Windows -- are about to have their first major releases of the century.


          Microsoft
          Source: MSN

          Intel (INTC - commentary - Cramer's Take - Rating) has increased its book value from $4.88 per share to $6.11 per share, but its P/E ratio has dropped to 17 from 32. Earnings have soared to a record $8.66 billion in 2005 from $1.29 billion in 2001. Net margins slumped to 5% in 2001, but have climbed steadily ever since, hitting 11.6% in 2002, 18.7% 2003, 22% in 2004 and 22.3% in 2005.

          Despite all this progress, and the Dow hitting all-time highs, the stock is down over 40% on the century.

          Intel
          Source: MSN

          GE (GE - commentary - Cramer's Take - Rating) has been another great success story -- in terms of the effectiveness of management, if not in terms of the stock price.

          GE has increased book value per share to $10.43 in the beginning of 2006 from $4.32 in the beginning of 2000. Net margins are 30% higher, and yet the P/E ratio has slipped to 20 from 36. Apparently the market has no faith that the company can continue to deliver. GE is down 30% since Jan. 1, 2000.

          And this is completely, completely ignoring the fact that GE has the best new show on TV in the fall 2006 season, Heroes. It's followed in the 10 p.m. Monday slot by another great show, Studio 60.

          General Electric
          Source: MSN

          Pfizer (PFE - commentary - Cramer's Take - Rating) has come under some heat lately for shelving a potential blockbuster drug, but in general the company has done remarkably well over the past six years and only stands to benefit as the need for health care increases with the aging of the baby boomers.

          Net income has jumped to $8 billion in 2005 from $5 billion at the end of the last century. Net current assets have surged to $66 billion from $14 billion in 2000, bringing book value per share to $9 from $2.24. And yet the P/E ratio has contracted to 23 from 50, as the stock has dropped almost 40% since Jan. 1, 2000.

          Pfizer
          Source: MSN

          Wal-Mart (WMT - commentary - Cramer's Take - Rating) is down 20% on the century -- a century that has, in all other respects, been remarkable: Sales have jumped to $312 billion from $165 billion in the past six years, and net income has soared to $11.2 billion from $6 billion. Book value per share has risen for 10 years running, going from $5.80 in 2000 to $12.77 now. What has WMT done to deserve its P/E ratio contracting from 40 to 17?

          Wal-Mart
          Source: MSN

          Most of these stocks could care less about a weak dollar since they are all expanding their international businesses. All of these companies (Wal-Mart in particular) will experience growth regardless of whether or not there is a recession.

          Like all things in the market, I expect the negative trends in these stocks to reverse and that 2007 could be a huge year for the Dow [B]as the P/E ratios of these companies get back in line with the gains at these companies and to the current levels
          The Dow Jones Industrial Average has been largely pathetic so far this century. The newspapers will mention all-time highs, but it's only part of the story.

          The Dow has been mostly propelled by just a handful of stocks, notably Altria (MO - commentary - Cramer's Take - Rating) (up 237% since Jan. 1, 2000) and Exxon (XOM - commentary - Cramer's Take - Rating) (up 120% since then).

          But most of the Dow components are still in the severe bear market that started in 2000, despite doubling profits across the board, doubling book value, improving margins and a severe decline in interest rates since then. Price-to-earnings ratios have contracted, despite the increasing earnings stability and the decline in long-term interest rates (which historically has a great effect on P/E ratios).

          Twenty of the Dow components are down in the 21st century, many of them in bear market territory (declines greater than 20%) that they have yet to come out of. I do not believe this bull market could "get tired," as many pundits say, until these quality companies climb out of the cellar.

          Let's take a look at five Dow components and consider the prospect that their shares might finally break out -- that is, catch up to their improving fundamentals -- in 2007.

          Microsoft (MSFT - commentary - Cramer's Take - Rating), for instance, has seen a drastic decline despite improving every metric in its business. The company is on the precipice of having a blockbuster year in 2007.

          Yet the stock is down 45% since the beginning the 21st century, even as book value has gone from $2.78 in the year ended June 1999 to $3.99 now. Price-to-book has plunged to 5.85 from 16. The P/E ratio has gone from 50 to 20.

          The market is giving zero credit for the fact that the only profit centers at Microsoft -- Office and Windows -- are about to have their first major releases of the century.


          Microsoft
          Source: MSN

          Intel (INTC - commentary - Cramer's Take - Rating) has increased its book value from $4.88 per share to $6.11 per share, but its P/E ratio has dropped to 17 from 32. Earnings have soared to a record $8.66 billion in 2005 from $1.29 billion in 2001. Net margins slumped to 5% in 2001, but have climbed steadily ever since, hitting 11.6% in 2002, 18.7% 2003, 22% in 2004 and 22.3% in 2005.

          Despite all this progress, and the Dow hitting all-time highs, the stock is down over 40% on the century.

          Intel
          Source: MSN

          GE (GE - commentary - Cramer's Take - Rating) has been another great success story -- in terms of the effectiveness of management, if not in terms of the stock price.

          GE has increased book value per share to $10.43 in the beginning of 2006 from $4.32 in the beginning of 2000. Net margins are 30% higher, and yet the P/E ratio has slipped to 20 from 36. Apparently the market has no faith that the company can continue to deliver. GE is down 30% since Jan. 1, 2000.

          And this is completely, completely ignoring the fact that GE has the best new show on TV in the fall 2006 season, Heroes. It's followed in the 10 p.m. Monday slot by another great show, Studio 60.

          General Electric
          Source: MSN

          Pfizer (PFE - commentary - Cramer's Take - Rating) has come under some heat lately for shelving a potential blockbuster drug, but in general the company has done remarkably well over the past six years and only stands to benefit as the need for health care increases with the aging of the baby boomers.

          Net income has jumped to $8 billion in 2005 from $5 billion at the end of the last century. Net current assets have surged to $66 billion from $14 billion in 2000, bringing book value per share to $9 from $2.24. And yet the P/E ratio has contracted to 23 from 50, as the stock has dropped almost 40% since Jan. 1, 2000.

          Pfizer
          Source: MSN

          Wal-Mart (WMT - commentary - Cramer's Take - Rating) is down 20% on the century -- a century that has, in all other respects, been remarkable: Sales have jumped to $312 billion from $165 billion in the past six years, and net income has soared to $11.2 billion from $6 billion. Book value per share has risen for 10 years running, going from $5.80 in 2000 to $12.77 now. What has WMT done to deserve its P/E ratio contracting from 40 to 17?

          Wal-Mart
          Source: MSN

          Most of these stocks could care less about a weak dollar since they are all expanding their international businesses. All of these companies (Wal-Mart in particular) will experience growth regardless of whether or not there is a recession.

          Like all things in the market, I expect the negative trends in these stocks to reverse and that 2007 could be a huge year for the Dow as the P/E ratios of these companies get back in line with the gains at these companies and to the current levels of interest rates. I'm expecting Dow 16,000 by year-end 2007 as a result.
          Last edited by DemonD; 12-08-06, 05:20 AM.

          Comment


          • #6
            Re: Contest #2: Stupidest Excuse for a Stock Market Rally

            Because Vodoo Al, Uncle Ben and Daddy Bush says so.


            " Victory :confused: is possible in Iraq "
            " Daddy made a bogus commision to save face for his moronic son "
            " Hey Darth, get your ass here now to Saudi or we are really going to cut production "

            I get tired of the CNBC propaganda; though the red head in the morning , errr well does have nice assets :cool:


            Oh, and J. Cramer is really short


            The market is irrational , investors are delusional and I have no idea why it will go higher. I just like to make fun of the ruling elite
            I one day will run with the big dogs in the world currency markets, and stick it to the man

            Comment

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