Mark Hulbert at MarketWatch wrote about influential investment newsletter editor, Richard Band's outlandish forecast that the Dow Jones Industrial Average may end the year at 16,000. This very bullish estimate of a 33% gain in the index from someone who's not typically a headline-grabber made Hulbert take note. Hulbert, who tracks performance of some of the best newsletters in the business, has been tracking Band's Profitable Investing newsletter since 1991. In that time period, Band returned a 8.6% annualized return compared to an almost 11% annualized return in the Wilshire 5000.
Not bad but not outstanding. So why is Band all bulled up?
Technical factors have Band singing a very upbeat tune. The first, according to the article "has to do with the stock market's internal characteristics when it hit a low earlier this month. Band argues that that low possessed "many striking technical resemblances to the great bear market bottoms of the past.""
So, how does Band recommend playing the markets at this important juncture. He recommends a couple of market ETFs. Specifically, Band points to the iShares Russell 1000 Growth Fund (NYSE: IWF), the iShares MSCI Emerging Markets Index Fund (NYSE: EEM). Another recommendation is in a fund I've never seen before (but maybe I should): the Selected American Shares (SLASX). This fund, a 4-star fund according to Morningstar, invests in US large caps and has returned an annualized return over the past 5 years of almost 13%.
Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
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Reader Comments (Page 1 of 1)
3-28-2008 @ 3:10PM
Jeff said...
or maybe he's so bulled up because it gets people to listen. sometimes people say unbelievable things- not because they believe them but because they want people to listen.
3-28-2008 @ 3:37PM
william lindblad said...
Hmm! I don't think anyone is going to listen and I really hope that I am wrong ,but I think the 10,000 mark is coming - maybe less. I predict late July-mid Sept. I expect a major economic impact in that time frame and it is not on anyone's radar at present.
3-28-2008 @ 4:45PM
geeniusatwrok said...
The simplest indication that a market has topped/bottomed (that I know of) is to chart the SPX/SPY over 10-20 years with a 20-week and 50-week simple moving average. Buy when the 20-wk is at least 1% over the 50. Sell when it's at least 1% under the 50. The sell signal appeared in January. It's still very much a sell signal.
Nobody can time a bottom, but this tells when it's fairly safe to get back in the water.
3-28-2008 @ 4:56PM
Sheldon L said...
Have to disagree with a few things here:
1) Under performing against the index by a -2.4% for 17 years (25% of actual return) is extremely poor performance. So much so that anything he would have to say is worthless.
2) a 33% rise in the market from our current levels by year end would be miraculous with no signs of earnings to drive the market.
3-28-2008 @ 6:52PM
the doctor said...
Yeah, it can happen....All wallstreet Companies. keep 3,4,5 sets of accounting books.... Remember it's more profitalble for Companies. to report higher earnings and pay millions in taxes than to report a loss in profit and lose billion's. If you want to gamble with you money odds are better in VEGAS, Baby!!!!!
3-28-2008 @ 7:12PM
the doctor said...
Yeah it can happen......Alot of fools believe that Wall Street companies really disclose everything about their performances. I hate to burst your buble Wall Street is full of DUDU. How about Bear and Stern till the last day their top man was lying to the public and the media when confronted with rumors. Most of the Companies have 2,3,4,5,6 or more sets of accounting records. Remeber it is cheaper to report profits and pay millions in taxes than it is to report a profit loss and to lose billions....If you want to gamble with your money GO TO VEGAS, BABY.. YOU REALLY HAVE BETTER ODDS THERE....My prediction for the year 2008 and ....Dow below 7,000..... For all of you that have IRA's 401K take your money and run before Wall Street does... Your money is only making their Presidents, Ceo's Coo's financialy secure for the rest of their lives, and their children etc.... WAKE UP AMERICA !!!!! WALL STREET CROOKS HAVE CONTROL OVER YOUR FINANCIAL FUTURE...
3-28-2008 @ 7:58PM
Ray said...
Besides the stockmarket there 3 roots to all evil. (1) Religion) 2(politics) and 3(CPITALISM)