While I still wouldn’t count out the “Don’t Worry, Be Happy” crowd on getting the DJIA to a new recovery high, the constant questioning from readers and investors about my stance regarding the U.S. Stock Market requires this hopefully fully-clear comment.
Just two days after the all-time high on the DJIA, I issued my most bearish commentary ever. I said not only to sell all stocks except those related to precious metals, but to short the stock market. I remained a growling bear until just one day from the bottom last March when I announced I was leaving the bear camp. As the rally took hold, my target became 10,500 – 11,000 on the DJIA. Many of my former bear friends remained entrenched in their positions and ended up being mauled by the greatest bear market rally in modern times.
Apparently my sense of humor is misunderstood (and based on some emails, very much disliked) when I intertwine it into my market forecasts. It seems “my bear suit is pressed and bags are packed” wasn’t “strong” enough for some to appreciate I was no longer in the bullish camp towards general equities.
There’s a serious mistake both individual investors and professionals make in that they feel a need to catch every up and down move in a stock, stocks, market or markets. A sense of having to be either bullish or bearish at all times or “miss” something leads many into losses that otherwise would not occur, IMHO.
I think my advice is clear to many but to those who somehow haven’t been able to derive in their mind a clear picture, let me try again so no one (except those who seemingly enjoy misinterpreting) is confused.
U.S. Stock Market – As noted earlier, even though the “Happy” people can get beyond this current correction/consolidation and still make a run to 11,000+ on the DJIA, yours truly is no longer a bull on U.S. equities in general. There’s some serious technical damage (see this great article).
It’s also critical to understand that I’m also not looking for a market crash or anything close to it. That’s why I’m not shorting it as I did in late 2007. Instead, I believe our market and economy is going to look similar to that of the Japanese since 1989. I’ve written and spoken about this several times. Within their 20-year-bear-market were several 50%+ bear market rallies. Such has been the case for us since last March and such is the case I envision for years to come. But over the long run I don’t see major general equity gains year after year for years to come.
America is no longer the engine that pulls the economy worldwide. I continue to believe other areas of the world and markets can greatly outperform ours and equity investors need to be greatly over-weighted in non-U.S. companies. The exception to this is those related to metals which I will discuss shortly. As hard as it appears for some, simply avoiding the U.S. stock market for the most part is my choice.
…..be sure to check out Peter’s website regularly HERE
On Major Moves, Grandich has been very right and not only saved many investors fortunes, but expanded them dramatically. On November 3, 2007 at the MoneyTalks Survival Conference, Peter Grandich of the Grandich Letter warned that “an unprecedented economic tsunami will hit American beginning in 2008”. Peter advised publicly to short the US market two days from the top in October, 2007 and stayed short until the last week of October, 2008. He began to buy stocks in March 7th, 2009. He also bought oil and oil related investments near the lows after the dive from $147.
….go to visit Peter’s Website.