Dow Breaks 10,000, Officially Disconnects From Prosperity Of Normal Americans
The Dow broke 10,000 today for the first time in a year. Hoorays. It's like the 90's all over again for the very first time, only this time we're not even going to pretend like you're invited to the party. P.S. When you account for a 25% devaluation in the dollar, it's really only 7,537. [ZeroHedge]
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The Dow Jones industrial average is flirting with the 10,000 mark, a milestone that many will hail as a sign of economic recovery. But the brains on Wall Street "are likely to greet the Dow's achievement with a collective yawn," Ben Steverman writes at Business Week. That's because "[t]raders, strategists, and portfolio managers all but ignore the Dow in favor of other indexes," such as the Standard & Poor's 500, which represents a much broader and diverse swath of companies-500 stocks to the Dow's mere 30. And the Dow has been underperforming these broader indexes so much this year that it would "already be approaching the 10,500 level" if it had done as well as the S&P 500.
Yay double dip!
Well perhaps you weren't invited , buying Ford at 1.99 per share has been good to me. Most folks could afford some of these low priced stocks during this downturn. Maybe not the unemployed, but if unemployment is 9.8%, then 90% ARE EMPLOYED.
And this is/was a great time to grab up some.
Most of my stocks are still pretty low. Yeah I haven't lost money, but I'm not exactly putting on my party hat. What's up with that Wall Street?
@bricko:
I really wanted to buy ford back when it was $2-$3, but unfortunately, I had no money! The one auto company that seems to have their head on straight.
@Blueskylaw: It is hailed as an economic recovery, yes. But between the lines, the Dow has reached 10,000 simply because of a lack of faith in the dollar. I'd rather have my disguised as anything other than a cotton rectangle.
@Mr.Duke:
With other articles like "Was Lee Harvey Oswald a Federal Agent?" and "World Cops"
How can that site not be credible?
A dead cat bounce is not a 20% upward move in 10 months...
...There is a good argument for a pull back, but cat-bouncing this is not...
What's up with the high DOW, but still low employment numbers?
In the words of Dave Chappelle, "I'm rich, bitch!"
It's like the 90's all over again for the very first time, only this time we're not even going to pretend like you're invited to the party.
Unless you've got a 401(k) and a few years left before retirement. That's lots of people.
@quirkyrachel: Because corporate profits and national employment are only loosely correlated.
Yes, if large numbers of people lose their jobs then it will be harder to find buyers for your products.
But this is a kind of prisoner's dilemma. If I own a company and I fire 10% of my workforce while my competitors don't, then I end up doing better. But then if everyone ends up firing 10% of their workforce then no-one gets ahead and demand drops so we all end up losing.
Same thing happens when you export jobs overseas to where no-one's wealthy enough to buy your product. Profits go up for a bit as margins fall, but once everyone starts doing it then we're all screwed.
This is the environment that conservatism has created and Wall Street is celebrating.
Take some accountability people and spend more time proactively managing your money and less time following the herd (eg. buy low and sell high does actually work).
I simply invited myself to the party.
Got into AIG @ $.51 ($10.20 after the reverse split), Ford @ $2.08, YRCW @ $1.57. Gotta love the market!
@bricko: If unemployment is 9.8%, that does not mean that 90.2% are employed; it means that 9.8% are currently receiving unemployment insurance money. So, if you're unemployed, and you don't qualify for an unemployment insurance claim, you're not counted in that 9.8%; you're counted in the 90.2%.
Personally, I wish we counted actual unemployment. The Washington Post said back in May that the actual unemployment rate was almost 16%:
I can't imagine what the actual unemployment rate is now.
Pfft, welcome to the party... Meet TSX, hes been here awhile.
@henrygates: if i had paid for the stocks i just sold this afternoon to help me pay for car repairs and dental work i would have lost money. they were part of my work benefits so it only hurt a little.
but at least they went up before i sold. *also only a little*
@Saboth: Uhh...no...they just happened to refinance their debt BEFORE the credit crash...they were actually in worse position, but lucked out and it happened while there was still credit available
@bricko:
I am jealous of you but cheer you on for your smart purchase. I had ford stock when it started to slip to 9 bucks and sold it as quick as I could, forseeing a crash.
Yep crashed. I wanted to purchase more when it hit near $1 - 2 dollars but I forgot to keep up on it. So again good job on buying it. Since I missed it can you buy me a burger I'm poor LoL :P
@PunditGuy: Unless you're now unemployed, so the 401k you were socking away is now sitting idle while prices are low.
The stock market officially disconnected from the prosperity of normal americans a long time ago, like in 1983
Bring on the next bubble! If didn't buy in last March, you missed the boat!
DOWn, baby, DOWn!
~40% Return YTD for my primary mutual fund.
Won't make up for last years behavior but it is a start.
Nice to know that all those worthless rich f**ks, corporate execs, politicians, and bank and auto CEOs have finally got enough of our tax dollars in bonuses and bailouts to start spending them on oil and gold futures again.
login to your brokerage account and keep updating those "stop".....
I have all my money in walmart bucks
Kudos blasfacts all around! And who said late fees don't work?!? (Oh that was blockbuster...)
Still...unless you're a day trader I don't see how the value of your stocks (or my stocks) going up is going to help you when you don't have a stinkin' job or work equally demeaning contract jobs.
@Shaggy: yeah, & don't forget that included in that 90% are people who are underemployed, like the machinist-turned-burger-flipper that's now making 30% of what he used to make.
just b/c someone is working doesn't mean they aren't still screwed to the wall.
@whateverthisis: The problem is that logic doesn't work so well in the market anymore - too many people have access and banks have the power to affect the market by dropping a rumor, and analyst call, etc.
@Ronin-Democrat: That's the best thinking you can do - I update the stop losses every week.
Worked two weeks ago for CAT- sold at $53 because of the stop, rebought around 47.5 now it's back at $54.
@bricko:
So, do you think Ford was cheaper at $2 with X shares outstanding than it would be at $20, with 10% of X shares outstanding? A low share price, in the absence of sharecount, is meaningless.
25% devaluation of the dollar? Well, only if you want to buy things in Europe. Certainly not here.
@zibby:
There is zero difference between (a) buying 1000 shares of a a $2 stock and having it go to $3 and (b) buying 100 shares of a $20 stock and having it go to $30. You make 50%, or $1000, either way.
You have to decide whether the _market cap_ is too low - how many slices there are in that market cap is irrelevant.
@lannister80:
Yeah but at least this kind of gambling gives the edge to the gambler rather than the house.
@Blueskylaw: So the Dow achieving 10,000 might be met with a collective yawn from traders, but both the S&P and Nasdaq indicies have gone up by roughly similar proportions as the Dow.
The DJI is approximately 10x the SPX, and Nasdaq has been around 2x SPX for at least the several months I've been tracking it.
Ergo, your comment doesn't appear to address the real reason why nobody sees recent market games as a true sign of recovery.
Statistically, no, it doesn't. The large majority of individual investors who actively manages their money will underperform buying and holding the market. You may be special - or you just may be the result of random chance thus far.
@NeverLetMeDown: I don't know where you have been living but prices for nearly all basic goods are up at least 25% from year 2000. The only things that have gone down are electronics and cars. Anything basic you need to live has gone up. Waaaay up.
Can any smell another crash coming?
I sure can...
The P&E's are way too inflated right now, they're completely disconnected from reality as well, and when that happens, it's over valuation, and overvaluation leads to market crashes (ie; Dot Com Bubble).
Good luck!