Global economics: I see DOW @ 5k in 3-5 yrs. Here is why:
Saw Peter Lynch interview on TV today, among others. Also been following thestreet.com & Worden bros and general global/domestic news. Political & global pressures, Clinton going out of office soon, new president (more than likely democrat), international termoil, etc... too many unknown variables. Is creating lack of faith in existing financial structure.
Mr. Lynch was very frank. Said everyone noticed the market performance over the last 4 years or so. 97 & 98 were emotional buying periods. This created a bubble (over-inflated prices), expecially in the tech sector. They mentioned the market @ 6k would be fair value. 5k would be a little unvervalued. 7k, over-valued.
Over the last 4-10 yrs, numbers are becoming exponential, bad news. It can't keep growing at this rate, it creates decrease in value.
Remember, global economics is just like playing poker. You come to the table with a fixed amount you can spend (the size of your bank account). If someone keeps winning, how are the losers gonna come up wit da cash to keep playing?
In our global society, the winner(s) usually loan cash to the losers so they can keep playing.
In the 80's Japan was the winner, 90's U.S./U.K. was the winner, who's next? China? United Europe?
Whatever the case, monies need to flow out of the winners now to help stabalize things. Everyone will soon have cash to play with again, but at the sacrafice of Europe and the US. Who will be the next winner(s) after all this washes out? Hard to say. But I'll tell you what, brother, I feel Europe and China are the next 2 forces to be reckoned with....
I wouldn't be surprised to see 5k in 2 yrs. |
