Sunday, August 07, 2005

It's a sure thing

Another week is starting and time to check the tea leaves. CNBC is exhorting the strength of the markets. S&P at 4 year highs. It's all systems go and the stocks look a sure thing. China, India and this time it's different. Gotta get long. The US markets peaked in 2000, and after 5 years of going sidewise surely it's time to make new highs. After all, if you had bought the index at the end of '82 and sold it at the end of '99 you would have earned 11 times your price in about 18 years. That's neat. Buy and hold and get rich.

But looking back further, if you had bought it in mid '63 and sold it in mid '82, you wouldn't have made a fig; not one thin dime. Not even earned interest on your investment for nearly 19 years. There's been a lot of people buying this market between 1999 and 2005 who have yet to see any meaningful profit. How long will they hold? Those stochastics are starting to look like bearish divergence.

Fortunately, we trade the Ozzie Index, and the China-led commodity story is one way, right? Buy and hold, right.? Or is that just a "dot-com modity" boom, too?? Star light, star bright, first star I see tonight; I wish I knew, I wish I knew.

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