Media Appearance: Kudlow & Company (10/03/06)

Tuesday, October 03, 2006 | 03:40 PM
in Media

Kc128x88


Back in the studio for the regular appearance with Kudlow tonite, at 5:00 - 5:25pm.

The topics will be Dow Rally, The Economy, Sentiment, and Earnings. Guests include the erudite Stephan Abrahms (Trust Company of the West), the insaneley bullish J.J. Burns (of the eponymously named firm), and my latest contrary indicator, Joe Battapaglia (Ryan Beck & Company).

A few random thoughts about this market:

• The Narrowness of the rally continues:

ice All time high Date of high Recent high % off all time high
Dow 11,750.28 (1/31/00) 11647.69 0.25%
Tran 5,013.67 (5/31/06) 4433.34 11.57%
SPX 1,552.87 (3/31/00) 1333.7 14.11%
Nasdaq 5,132.52 (3/31/00) 2258.3 56.00%
NDX 100 4,816.35 (3/31/00) 1656.07 65.62%
Russell 784.62 5/31/2006 729.94 6.97%

The Dow has only 10 stocks above their January 2000 highs, and of those 10, four are responsible for dragging the index higher – Boeing, United Technology, Altria and Caterpillar.

• Despite the recent move towards big cap and tech, be aware of the pundits who have been advising you of this for the past 5 years have been very, very wrong. (We made the suggestion to shift to big caps over the summer).  The Nasdaq 100, for example, is still down an eye-popping 65% from its 2000 highs.

• The 3 bullet points above are why most investors are not feeling like they are at 6 year highs; Unless they hold only Dow stocks – or the 4 mentioned above – most investors portfolios remain far below their 2000 peaks.

• Cash has outperformed the Dow since January 2000; Even considering reinvested dividends; cash STILL out performs the Dow.

• The Dow's Real (inflation adjusted) performance, even with dividends reinvested, is significantly below breakeven.

• Lastly, see this for Why the 1994 Goldilocks scenario is so unlikely.

Should be a gas . . .

Tuesday, October 03, 2006 | 03:40 PM | Permalink | Comments (13) | TrackBack (0)
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Comments

The headline according to
AP : "Dow soars to new closing high of 11,727 "
Bob: "Six years later you're finally back to break even... except... well you're really only half way back to break even because of inflation. Woohoo"
Yes, call me cynic.

Posted by: Bob A | Oct 3, 2006 4:32:53 PM

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