You all know that I have a peeve about ridiculous statistics. If you haven’t listened to the financial press recently, you’ve missed all the talk about how the DOW has risen 10 days in a row! It hasn’t done that since 1993. Also the DOW is up 11% this year. Since 1950 there have been 12 times that the DOW has been up 8% or more before March 15th. In 10 of those 12 years the DOW was higher 3 months out – between 1 and 6%.
When I was first a broker with Dean Witter in the early 80’s, we had a squawk box in the front of our office. Every morning different strategist and analysts would come on to fill us in on their outlooks, offerings or viewpoints. There was a technical analyst named Joe Feshback who would come on and take calls from the field and comment about individual stocks from his chart perspective. Wow was he impressive! He would look up a chart and tell you exactly and confidently what the stock was going to do. I’d been in the markets since the mid 70’s but had never seen this type of guy. It was really great when you were unsure to hear a person boast so confidently what the future would bring. Sometimes he would talk about the general market and what his “indicators” were telling him.
Then came 1987 and the crash in October. The crash itself was Monday 10/19 and the market fell 500 points or over 22%. The week prior it fell every day for a total of 250 points or 10%.
On a personal note, here’s a story that illustrates some of the problems with our economy and banking system:
I have a mortgage on my home residence, but no other debts. I have several properties that I have bought for cash. I decided, with these very low rates, that I would do a financing on one of them at about 50% of value. The property is two doors down from where I live. I bought it in February 2009 and completely redid the inside. I have a very stable and good tenant in it. They have been there for two years – actually 23 months – and they just resigned a new lease at 3% more than last year's lease, that starts November 1.