isnt a down turn a turnaround? On what premise do you base the statement "the market WILL turn around?"Historical Dow is 5-6k.If you look at P/E ratios,they are way outta whack-this is a uselss blog without anything to back it up

Brad,
You understand nothing and add nothing.
1) Naturaly a "down-turn" can be viewed as a turn around...but if we are in one on the down-side than Up is the turn-around. A history of the stock market indicates being in it is better than being out of it even if you invested in 1929!
2)What history are you speaking of about P/E ratios. The DJIA has a higher P/E average than its 70 year average but not that much higher than its twenty year average.
3) The P/E ratios reflect a market with greater growth prospects than ever before and fewer competitors than ever before in large caps, and they are shrinking daily. Also there are billions more potential investors and capitalist today than twenty years ago.

If yo speak of backing up the story concept then your commentary should be backed up with more than your uninformed critique.

I understand plenty,my investments are doing great and will continue to as the market declines.The rocket shot of the 90's when you could throw money at ANY stock and make money are over.There are many stocks with P/E's well above 20(which is still high IMHO).Some stocks HAVE no earnings,priced upon speculation only.This is not sound investment strategy.But per your blog,holding cash is a worse investment.As the dollar falls that cash is worth LESS.And as the govt printing presses continue to roll,the dollar will continue to fall.Once inflation kicks in,that cash in a bank at 5% will lose value as inflation will be higher.Please get a clue.

Brad,
I appreciate the dialog because your limited perspective and swinging at shawdows allows other readers to learn.

I do not advise people to invest in stocks with P/E's of 20. If you read my other posts you will find I am a value investor and would not do that. I point to low P/E's, low P/S, P/B, solid cash flow and dividends.

Having no cash or liquidity makes no sense. Warren Buffett has your shared concern about the weakness of the dollar and still holds $37 billion in cash or short term investments.

Good luck to you. Money can be made in many ways and if you are successful and happy, great, but the advice I have given is solid, time tested and backed up by the greatest economists and investors of all time - so your your complaint is bewildering if you are an experienced investor.

I have to side somewhat with Brad. The statement that the market will be up in the long term , just isn't true, it's only your opinion, Sheldon. Times are changing, like I told you a while back, you have to look at what's happened over the last 25 years, and ask if this trend will continue, or if things will change. Economics conditions and the direction that the stock market takes are determined by the actions of people, it's not the same as physics. Just because it's done something for 20, 30, or 40 years, doesn't mean it's movement can be predicted for the next 10, 20 , or 30 years.

Mr. N.
Always appreciate your commentary. Thanks you for taking the time. First, Brad is assuming I think people should be increasing their cash positions to a level that offers no reward. Second everyone has different time horizons for kids college, a house, a car, or retirement and must examine their own circumstances.

Second the market has gone up not just in the last 20 or 30 or 40 years but since the beginning of markets. Look at a 100 year chart for BUD, JNJ, or UPS; there are fits and starts, downswings, lateral periods in the market lasting for many years, but it always goes up and for a very good reason that is basic economics.

In the short run (which may sometimes be years) there are market anomalies, but in the long run the cost of goods and services must balance out with the amount of capital in circulation. You and Brad are certainly correct that if the government continues to print money or issue bonds it will affect the market negatively. No argument from me.

We could very well be in for some tough times. If they do not come immediately they will come soon enough. That said diversification and liquidity are a way to lighten the potential blow.