This is the market view from five prominent stock market bloggers. I asked them each one simple question: Where do you think the market is headed, and why? Here are their responses (listed in alphabetical order):
James Altucher – TheStreet.com
Altucher is a financial journalist for the Financial Times, daily contributor to TheStreet.com (NASDAQ: TSCM), and founder of Stockpickr. His articles cover every angle of the market; he also stars in feature videos with other financial luminaries. He is the author of Trade like a Hedge Fund, Trade Like Warren Buffett, SuperCa$h, andThe Forever Portfolio.
"The market sold off too much. S&P 700 was anticipating the apocalypse, which is not happening. With $15 trillion in stimulus worldwide happening over the next one to four years there is only one hedge for inflation: owning a broad spectrum of stocks. Buy internets, nuclear energy (Altucher mentions Shaw Group (NYSE: SGR), Cameco Corp (NYSE: CCJ) and USEC Inc (NYSE: USU) in THIS video segment), gold producers, and healthcare stocks."
Doug Estadt – WallStreetMedia.com
Estadt is the CEO of Wall Street Media, which delivers free daily videos with the latest investment news and stock picks. Estadt is also the founder of Wall Street Webcasting, which uses cutting edge technology to cover earnings calls, conferences, and corporate communications for companies worldwide.
"I'm bearish on the outlook for stocks. I haven't seen or read any financial news from anyone who doesn't show me their own real money trades, either on StockTwits or Covestor. I make my trades/investments based on what I see with my own eyes or what other real money traders tell me they see and we're fairly unanimous, every day we read of more layoffs and see more stores/businesses closed or closing. My conclusion is that those ever-growing masses of unemployed won't be out spending recklessly and more stores and businesses will close in a negative spiral and sooner or later stocks will reflect the severely decreasing earnings."
Joe Donohue – UpsideTrader.com
Donohue, aka Upsidetrader, was one of the first premium bloggers on Stocktwits.com. As an avid technical day trader, he sends out free real time trade alerts to over 4,600 followers on Twitter, although you must sign up as a member to receive his premium newsletter. He was previously an original founder of a $500 million hedge fund, before selling his stake in 2005; he was also a retail broker for 13 years.
"I think we have enjoyed a wonderful rally from the lows through an obvious bout of short covering and a Pollyannish, but incorrect view that things will be better sooner than later. From my perch, we need to see an improvement in banking, housing and unemployment first, and we are far from cured on that front. I don't believe the economy will bottom until the first or second quarter of 2010, many of the pundits feel it will be the third or fourth quarter of 2009. I couldn't disagree more and I still am looking for a correction of 15 to 20% from current levels."
Doug Kass - TheStreet.com
Kass has a long and outstanding track record in the finance industry. This well-known short seller went out on a limb in early March 2009 and called for a stock market bottom. Now with the market 30% higher, more people understand the magnitude of Kass' wisdom. You can follow his articles on TheStreet.com or watch for his frequent appearances on CNBC's "Squawk Box". Kass is also the founder and president of Seabreeze Partners Management.
"Based on a combination of fundamental, sentiment and valuation inputs -- I believe the U.S. stock market hit a generational low on March 9th. Most importantly there is light at the end of the economic tunnel after the government has gone "all in" with monetary and fiscal policy. For example, real consumer spending rose by 1% in 1Q2009, as compared to a 5% drop in last year's second half. As well, the cost of home ownership relative to income and rent has rarely been lower so a turn in housing can be anticipated now.
I anticipate a consolidation of recent market gains before an explosive rally toward the S&P 1,050 level, which could occur in the mid to late summer. The move to higher ground will not come without bumps as a number of non-traditional factors will weigh on the markets in the last half of 2009. Some of these headwinds include the deleveraging of bank and consumer balance sheets, the evaporation of the securitized lending market and the burden of greater financial regulation."
Mike Shedlock – GlobalEconomicAnalysis.Blogspot.com
Shedlock is the blogger behind Mish's Global Economic Trend Analysis and also a contributor to Minyanville and HoweStreet. While studying, analyzing, and reporting on a variety of macro-economic topics for his web site, Mish is also a registered investment advisor representative for Sitka Pacific Capital Management.
"Everyone thinks they know where the market is headed. What I know is: I don't know and they don't either. I am open to the possibility that the bottom is in, however I doubt it. Breadth, leadership, volume, and a whole array of technical factors suggest the bottom is not in. Whether or not the bottom is in, it is likely to be tested. IF that bottom is tested, we have to see how the market reacts. Assuming the bottom does not hold, we might see a decline to the 450-500 level on the S&P. Fundamentally, 450 or so seems about right. That does not mean we get there, or we take the logical path there if we do. Over the next five years I expect to see a wide trading range with the market going nowhere in general, but in an interesting way. The only way to take advantage of that forecast is to toss buy and hold out the window and be willing to trade. Buy and hold is likely to be dead for a long time."
Estadt is the CEO of Wall Street Media, which delivers free daily videos with the latest investment news and stock picks. Estadt is also the founder of Wall Street Webcasting, which uses cutting edge technology to cover earnings calls, conferences, and corporate communications for companies worldwide.
"I'm bearish on the outlook for stocks. I haven't seen or read any financial news from anyone who doesn't show me their own real money trades, either on StockTwits or Covestor. I make my trades/investments based on what I see with my own eyes or what other real money traders tell me they see and we're fairly unanimous, every day we read of more layoffs and see more stores/businesses closed or closing. My conclusion is that those ever-growing masses of unemployed won't be out spending recklessly and more stores and businesses will close in a negative spiral and sooner or later stocks will reflect the severely decreasing earnings."
Joe Donohue – UpsideTrader.com
Donohue, aka Upsidetrader, was one of the first premium bloggers on Stocktwits.com. As an avid technical day trader, he sends out free real time trade alerts to over 4,600 followers on Twitter, although you must sign up as a member to receive his premium newsletter. He was previously an original founder of a $500 million hedge fund, before selling his stake in 2005; he was also a retail broker for 13 years.
"I think we have enjoyed a wonderful rally from the lows through an obvious bout of short covering and a Pollyannish, but incorrect view that things will be better sooner than later. From my perch, we need to see an improvement in banking, housing and unemployment first, and we are far from cured on that front. I don't believe the economy will bottom until the first or second quarter of 2010, many of the pundits feel it will be the third or fourth quarter of 2009. I couldn't disagree more and I still am looking for a correction of 15 to 20% from current levels."
Doug Kass - TheStreet.com
Kass has a long and outstanding track record in the finance industry. This well-known short seller went out on a limb in early March 2009 and called for a stock market bottom. Now with the market 30% higher, more people understand the magnitude of Kass' wisdom. You can follow his articles on TheStreet.com or watch for his frequent appearances on CNBC's "Squawk Box". Kass is also the founder and president of Seabreeze Partners Management.
"Based on a combination of fundamental, sentiment and valuation inputs -- I believe the U.S. stock market hit a generational low on March 9th. Most importantly there is light at the end of the economic tunnel after the government has gone "all in" with monetary and fiscal policy. For example, real consumer spending rose by 1% in 1Q2009, as compared to a 5% drop in last year's second half. As well, the cost of home ownership relative to income and rent has rarely been lower so a turn in housing can be anticipated now.
I anticipate a consolidation of recent market gains before an explosive rally toward the S&P 1,050 level, which could occur in the mid to late summer. The move to higher ground will not come without bumps as a number of non-traditional factors will weigh on the markets in the last half of 2009. Some of these headwinds include the deleveraging of bank and consumer balance sheets, the evaporation of the securitized lending market and the burden of greater financial regulation."
Mike Shedlock – GlobalEconomicAnalysis.Blogspot.com
Shedlock is the blogger behind Mish's Global Economic Trend Analysis and also a contributor to Minyanville and HoweStreet. While studying, analyzing, and reporting on a variety of macro-economic topics for his web site, Mish is also a registered investment advisor representative for Sitka Pacific Capital Management.
"Everyone thinks they know where the market is headed. What I know is: I don't know and they don't either. I am open to the possibility that the bottom is in, however I doubt it. Breadth, leadership, volume, and a whole array of technical factors suggest the bottom is not in. Whether or not the bottom is in, it is likely to be tested. IF that bottom is tested, we have to see how the market reacts. Assuming the bottom does not hold, we might see a decline to the 450-500 level on the S&P. Fundamentally, 450 or so seems about right. That does not mean we get there, or we take the logical path there if we do. Over the next five years I expect to see a wide trading range with the market going nowhere in general, but in an interesting way. The only way to take advantage of that forecast is to toss buy and hold out the window and be willing to trade. Buy and hold is likely to be dead for a long time."
Closing Bell: When We All Love the PIIGS (NBG, SQNM, PG, ERTS, KO)
Serious Money: Cheapest Stocks List Shrinks from 26 to 21
Chasing Value: Hasbro Earnings Makes My Point
Reader Comments (Page 1 of 1)
4-23-2009 @ 1:49PM
Iridium said...
I agree with the sentiment that "Buy and Hold" is out the window. Over the next few years the overal picture of the stock market won't be much different.
Look at what happenned to many stocks if you bought them last year and held them. First you would have seen the value drop by a massive ammount. Then you may have seem much of that value come back only to drop again below the previous low.
The market favors ay traders and short sellers. That is a very dangerous route to take. When we throw long term out the window and focus on short term gains we are in danger of throwing the economy off a cliff at any moment.