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Is Dow 9321.10 Good for America?
We make more money buying quality companies for cash at value which consistently grow earnings and dividends. We learned trading in and out of the market on guesses, hunches and speculations with dangerous derivatives, ETFs or margin leverage is a recipe for wealth transfer the wrong way.
We make more money buying closely held quality companies with growing total returns.
We do know the fundamental value of this market is stretched thinner than for a very long time.
Hedge funds, institutions, pensions and the public are rushing into the 500 largest companies at prices 81 times earnings. This means it would take 81 years to recover investment, let alone any real return from dividends.
Of course the thin veneer headline rationale is that the recession may be over: Positive auto and bank earnings comparisons may lead the way out of bewilderness to the promised land of milk, honey and free healthcare, with real estate recovery not far behind.
Nothing could be less likely, GE, GS, Warren Buffett and Bobblehead media pundits notwithstanding. This economy does not turn on a dime or even after a quarter, two or four.
First, we are not in recession, but Depression, with four quarters of GDP down more than -15.5%.
The Official definition of Depression used to be GDP down –10%. Government apparatchiks now massage the numbers to moderate the truth.
Second, there were so many revisions to public government economic measures and standards we cannot trust them anymore. Cost of living, economic growth, jobs, unemployment? Private Shadow Stats do better and show us real levels twice official government statistics.
Deuteronomy, Ezekiel and Leviticus warn US not to use dishonest measures or standards. This appears the norm when the oath to defend, protect and uphold the US Constitution is violated with immunity, impunity and the support of the mass media memory hole on GE TV.
