Bernanke vs. Buffett: Who's Right on the Economy?

Bernanke vs. Buffett: Who's Right on the Economy?

Blue Chips Linger in the Red for '09

Blue Chips Linger in the Red for '09
Dow Industrials Come Up Short in Push to Erase Year-to-Date Losses

(Source Wall Street Journal)
Blue chips came tantalizingly close to turning positive for the year on Friday, but ultimately fell short amid volatile trading after a mixed employment report.

The Dow Jones Industrial Average gained 12.89 points, or 0.2%, to 8763.13, leaving the 30-stock benchmark down just 0.2% for 2009. Boeing shares leapt 4% and Hewlett-Packard rose 3.5%, but more Dow components fell than rose. DuPont, which suffered an analyst downgrade, fell 6%, and Merck, which said it's shelving plans to seek approval for a heart-failure drug this year, sank 1.9%.
The S&P 500-stock index slipped 2.37 points, or 0.3%, to 940.09. Its energy and basic-materials sectors were weak, tumbling 0.8% and 1.4%, respectively. The broad stock measure is up 4.1% for the year to date.

For the week, the Dow jumped 3.1%. It has gained in 11 of the last 13 weeks and gained 32% in that span -- the best 13-week period since November 1982, when it soared 34%. The S&P 500 rose 2.3% this week. It also has risen in 11 of the last 13 weeks, and climbed 38% during that stretch.

Energy stocks played a major role in stocks' gains this week, as crude-oil futures rose 3.2% on the week. But crude pulled back somewhat on Friday, settling down 37 cents at $68.44 a barrel in New York and throwing a little cold water on stocks.

"I think it's a little premature to get excited about the run in commodities as it's kind of a relief rally," said Stephen Lieber, chief investment officer for Alpine Dynamic Balance Fund. "There are people hopped up on the notion China and emerging markets will reinflate the world economy."

The Nasdaq Composite Index slipped 0.60 point, or 0.03%, to 1849.42. It has climbed 17% this year, and was up 4.2% this week. It has risen in 12 of the last 13 weeks and jumped 43% in that time. The Nasdaq has surged 46% since it hit a six-and-a-half year closing low of 1268.64 hit on March 9. Read Article... http://online.wsj.com/article/SB124419863671788589.html

UP AND DOWN WALL STREET DAILY The Market's Formula: A Square-Root Rally

UP AND DOWN WALL STREET DAILY
The Market's Formula: A Square-Root Rally

(Source BARRONS)By RANDALL W. FORSYTH
After nailing a 40% surge since early March, Doug Kass sees "potholes" in the road ahead.
LONG-TIME SHORT-SELLER Doug Kass shocked many of his followers by turning bullish at the beginning of March -- just before the stock market took off on a 40% tear.

Now, with the major averages up sharply from what he called at the time "generational lows," the skipper of Seabreeze Partners sees the road ahead to higher ground strewn with potholes.
Speaking at a conference presented by Barry Ritholtz, the money manager and author of the popular Big Picture blog, Kass recalled that when he made his bullish call in early March, stocks had been through their second-worst bear market ever in terms of price and multiple compression.
Price-earnings multiples had fallen to levels consistent with 6% inflation, while 46% of the Standard & Poor's 500 stocks paid dividend yields exceeding the Treasury 10-year note. Other valuation measures also were rock-bottom; stocks traded at 90% of replacement value while the market's capitalization was just 78% of gross-domestic product. Read Article...
http://online.barrons.com/article/SB124404271987981539.html

Jim Rogers: S&P Could Go to 50,000

Jim Rogers: S&P Could Go to 50,000

From The Business Insider, June 3, 2009:

Ahh, Jim Rogers, always good for a nice headline (see: above). In an interview with the Economic Times of India, the famously dramatic and bearish investor, hits on all his favorite themes, like the collapse of the West, the appeal of commodities and farmland, and of course inflation and the collapse of the dollar.

While he's negative on US assets -- he says he's gotten rid of all of his dollars, for the most part -- he advises against shorting this market.

It's a bear market rally. I was going to say I don't think S&P 500 will see new highs. But I have to quickly temper that by saying against the dollar because the S&P 500 could triple from here if they print enough money and the value of the US dollar collapses, then S&P could go to 50,000, Dow Jones can go to 1,00,000.

Which is one reason why I am not shorting stocks right now. Because there is a possibility of this sort of a thing. There is a possibility that stocks could go through unheard of levels, but would be in worthless currency. Read Article...
http://www.businessinsider.com/jim-rogers-sp-could-go-to-50000-2009-6