The 2007 stock market

Have you noticed that investors (!) are still buying Google?

What is the P/E ratio on Google?

My personal opinion about Google stock: with the downturn in the stock market, I believe Google will be hit hard, because it's one of the most speculative, high priced, stock. When the over-all economy gets a hit like the current one, spending on advertising will drop in line with consumer drop in spending.

Are we seeing a nice head and shoulders developing here for the DJI?

http://stockcharts.com/h-sc/ui

Below chart under range click on 1 year and for size tap landscape.

I believe the market is not reacting properly to the subprime debacle, and those who continue to speculate for a bull market will be big losers.

I've sold our year to date gains in our funds and transferred them into a money market account, and also sold some funds to take advantage of our unusually high medical/dental expenses this year to minimize capital gains taxes.

I'm anticipating a recession in 2008, and don't expect our funds to do as well as 2007.

Google is a powerful growth stock. Todate it's up 40%+ this year.

No dividend and no stock split. Still expensive at $700/share but worth it.

Barnhan said "there's a sucker born every minute." That still holds true today.

What do you think about the upward tick on the board today?

Will it hold till the end of the month, or are speculators moving in to sell their shorts?

You have support at about 12,750 and resistance in the 14,100 area. DJI has been bouncing between these two lines since the end of April. The market is reflecting the good and bad news and can't decide which way to go.

Don't know what's going to happen in the future. I've seen both optimistic and pessimistic reports, which means the economist themselves are uncertain, just like the market.

It does appear, from the viewpoint of most observers, that a recession is coming. Perhaps this head and shoulders is reflecting that and yesterdays surge was due to some good news on RIMM's 3rd quarter earnings and Merrill Lynch's cash infusion. That's short term stuff and doesn't reflect any long term events.

Sit back and see if DJI makes a strong breakout on any of the two lines I described above. I think that's when we'll get a good indication of where the market will go.

Xingu, I've also been hearing the pundits give credence to both the good and bad for this quarter and next year; it's a mixed bag with the preponderance showing a recession.

It sure was good to smell the roses for one day before the storm hits.

As I've opined in the past, I believe a 1,000 point swings are here to stay for awhile.

Short-Selling: Shorting for the 21st Century
December 20, 2007
http://www.businessweek.com/magazine/content/07_53/b4065078298819.htm?campaign_id=yhoo

listened to a short interview with

on CNBC last week .

while he thinks that there are some "cherries" ripe for picking , he said he will likely wait another two years before doing some serious bottom fishing .

overall our own investments (mixture of a major canadian bank , energy and dividend mutual funds plus GIC's ) have done reasonably well . the bank stock had a good run for about 15 years and is holding up well . it's continuing to pay a good dividend and i think i'll hang on to it .
but we are also going to do "some living"
hbg

year to date DOW is up 1100.

Xingu, Here's my take on China based on my recent visit there. They have over-built everything in Beijing, and the latest news is that most Chinese are unable to afford to buy all those new condos they built. They stopped letting foreigners buy into the housing market, because the speculators have increased the prices to the point most Chinese can't afford to buy.

China's biggest problem is their pollution and water shortage. Many are getting sick from working in those factories that produce all those toxic toys and computer products. They're not getting the proper protection from working with all those toxic chemicals, and are dying from it.

Their biggest problem is the water shortage. Manufacturing requires plenty of water, and they're running short of water for drinking and irrigation. The shites going to hit the fan sooner than later.

Most of those Chinese working in those factories can't afford the effects of inflation. Their food costs and fuel shortages are beginning to be felt by most of the Chinese.

They can't possibly sustain their growth while killing their environment and their people from working their factories. It has to stop someplace, and that will be sooner than later IMHO.

Their stocks are over-priced even today after suffering a bear market for over one month. It's gonna get worse.

The potential of China as a growing economy is dead in the water.

That's my humble opinion.

China
The bad news is that 2008 is the Year of the Rat.
During 2007, the Year of the Pig, Mattel is forced to recall almost 20 million items made in China because of lead paint on toy cars and tiny magnets that could be deadly if swallowed. Lead paint problems are also found in 844,000 Chinese-made Barbie accessories and toys with the Sesame Street brand.

Pet food makers recall more than 60 million cans of food laced with tainted melamine in wheat gluten from China. A huge underground distribution network for steroids, human growth hormones, and other bodybuilding drugs is traced to 37 companies in China. Chinese-made lunch boxes, given away by the California Department of Public Health to promote healthy eating habits among children, are found to contain lead.

Nike recalls 235,000 football helmets because the Chinese-made chin cup has a defective strap and has caused at least two concussions and a broken nose. Ethylene glycol is found in Chinese-made toothpaste. The government of China executes the former head of its State Food and Drug Administration.

no doubt , china is going to have its problems , but the chinese are very resilient ... and smart :



story in full :
TOYS FOR CHINESES CHILDREN

it seems that many chinese know what walmart has been up to for a long time - but the chinese have been around longer than walmart and will probably outlive walmart !
GOOD FOR THEM !

We went to a Womart in Beijing. The place was pacekd!

cicerone, I don't post because I am ignorant on the subject of economy/personal investment but I always read through your post and subject and would like you to know you seem ahead of the curve and that you are passing that info and knowledge to me, a younger and more modest (retirement) investor. Thanks buddy.

Please try and stay healthy. We need to pump you for more information for a while yet.

Was it also packed with TB-carrying individuals?

New tax regulation for 2008:

Those individuals in the top 0.1-1% of net incomes paying taxes in the USA will NOT be paying the usual 15% capital gains tax. They'll be paying 0%.

Must be nice to be rich...
:wink: