Consolidation For 10 to 15 Years???
November 1st 2008 19:26
Carl Swenlin of DecisionPoint.com has a very good historical chart of the DJIA showing five secular trends:
We need to look at charts like this from time to time to get the big picture. Swenlin writes:
I was registered in September of 1968. Swenlin writes that this "consolidation" may last 10 to 15 years. That may sound like the death knell to your retirement plans. However, I came through that '60s early '80s period in great shape. I remember we didn'tl ose any money in the downturn that ended in 1974. Why? We were conservative. We bought municipal bonds, utilities and defense stocks. We looked for value. Meaning we used traditional methods to determine value like book value and real and estimated earnings.
There was a time when you could buy Fred Meyer stock at a price and get the land that Fred Meyer own for free. We bought AA rated Oregon municipals that yielded 13% and Ist mortgage bonds on Pacific Power that yielded 17% to 18%.
Don't think of doom and gloom when you think 10 to 15 year consolidation. Think quality, think value and look for the technological breakthroughs in energy, defense and maybe water.
We need to look at charts like this from time to time to get the big picture. Swenlin writes:
On the chart (above) I have identified the five secular trends that have occurred in the last 80-plus years. First is the 1929-1932 Bear Market, which, although it was short, saw the market decline 90%. Next was a secular bull market that lasted from 1932 to 1966, which overlaps with the consolidation of the 1960s an 1970s. In the early 1980s another secular bull market began which peaked in 2000 (basis the S&P 500). Finally, we seem to have entered another consolidation phase that could last another 10 to 15 years.
I was registered in September of 1968. Swenlin writes that this "consolidation" may last 10 to 15 years. That may sound like the death knell to your retirement plans. However, I came through that '60s early '80s period in great shape. I remember we didn'tl ose any money in the downturn that ended in 1974. Why? We were conservative. We bought municipal bonds, utilities and defense stocks. We looked for value. Meaning we used traditional methods to determine value like book value and real and estimated earnings.
There was a time when you could buy Fred Meyer stock at a price and get the land that Fred Meyer own for free. We bought AA rated Oregon municipals that yielded 13% and Ist mortgage bonds on Pacific Power that yielded 17% to 18%.
Don't think of doom and gloom when you think 10 to 15 year consolidation. Think quality, think value and look for the technological breakthroughs in energy, defense and maybe water.
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Comment by Robert Caldwell
Market Herald
Robert