The following I'm posting from Nightly Business Report, January 24rth and June 20th respectively:
BRINKER: We're still bullish. We're still 100 percent invested. We think the market's going significantly higher this year. We don't want our subscribers to get caught up in the euphoria, though, regarding the new era of thinking of the baby boomers saving and so the market can only go higher and higher because their all saving for their early retirement. We just want to keep them on the straight and narrow.
KANGAS: Does the fact that social security is considering investing our funds in the market worry you at all?
BRINKER: I think if they just put a small part in, it might be a good thing because it would take it out of the hands of the politicians who are currently spending it.
KANGAS: Good idea. And what about the baby boomers taking all their 401K money out of safe haven to put it in the market? Does that worry you?
BRINKER: Well, I think as a long term strategy, it works. But, I think that expectations sometimes can get out of wack. We start to hear these predictions of Dow 20,000 and that's a little worrisome. We don't believe that.
KANGAS: Well, on your last visit with us, May 31st of 1996, the Dow was at 5643. You said 6,000 not a problem. In your previous visit, you said 5,000 not a problem. Now, you're saying 7,000 not a problem.
BRINKER: Absolutely.
KANGAS: What is the basis for this tremendous bull market? What is fueling it?
BRINKER: Well, everything is going right, Paul. Basically, we have just what the doctor ordered. We have 2.5 percent growth in the real gross domestic product. We have low inflation around 3 percent. Interest rates right now I think are even higher than they'll be later this year. I expect to see long rates go down about 1/2 percent from where they are right now.
Friday's Market Monitor...
DAVID ELIAS, CIO, ELIAS ASSET MANAGEMENT: It's great to be back Paul.
KANGAS: David, the Dow Industrial Average last week was up 346 points, we're seeing daily swings of over 100 points in the range, a new today in the Dow, above 7800, etc. Are we going to see this on a regular basis, this type of volatility in the market?
ELIAS: Like love Paul, volatility is here to stay and we have to get used to it and take advantage of it.
KANGAS: How do we take advantage of it?
ELIAS: Well for example, when Boeing (BA) got hit on some so- called bad news, we stepped in and bought it and if GE (GE) comes in with some short-term bad news, you could buy it because like Bette Midler's song, from a distance, if you look at the market from a big picture standpoint, we strongly believe this market over the next 20 years is going to 40,000 or higher, so anytime you have any dips in here, you should be an aggressive buyer.
KANGAS: Did I hear you say 40,000 or higher on the Dow?
ELIAS: That's what you heard Paul. We're looking for 40,000 or higher over the next 20 years and we think that's the most conservative number we can come up with. It might be 50 or 60,000.
Footnote
BB's three picks given to Kangas in January were:
Stanford Telecom at 32 (now 14 3/4)
Uniphase at 45 (now 52)
Ultratech Stepper at 28 1/4 (now 20 3/8) I'm not saying I'm doing any better. The point of this post is the sudden speculation about the DOW hitting 20,000? 40,000? Higher? Unimaginable levels to me. They said gold would hit $5000 too 18 years ago. In some ways I find this scary. |
