Brief outlook on 2015 market
For the last few years, most
market predictors have their crystal balls broken. It is due to the excessive
supply of money that leads to a non-correlation of the economy and the stock
market. It cannot last forever. It will correlate again when the money supply
is reduced.
2015 will be a tough year to
predict. I will predict a gain of 7% if the market does not plunge. As usual,
there will be two camps in opposite directions.
Good News
· The interest rate will start rising. However, 2015 is the year before election and no politicians will risk their chances by raising the interest rate.
·
The market is slightly over-priced.
SPY’s P/E is about 18 vs. the normal 15.
·
The economy is improving slowly.
·
Energy cost is reducing (bad for the energy
sector).
·
Most corporations have good profits especially
in the first and second quarter.
Bad News
· Margin debt is in the record high. The market would usually plunge the year after.
·
Interest rate will climb after the mid year of
2015. It will be slowly as mentioned before.
·
The national debts and obligations are high as a
percentage of the GDP. If we legalize 4 million illegals, how many will give up
their work and collect welfare?
What should we do
I would watch how the above will materialize. The weather man can predict the weather in the next few days better than the next month.
When the market is down, we need to know whether it is a
correction or the start of a market plunge. For a correction, you want to buy
stocks as in Oct. 15, 2014. For market plunges you want to sell everything. For me, I
prefer to ignore corrections these in 2015 as it could be the start of a
market plunge.
Most predictions from analysts
and fund managers are rosier than they actually are. Accept their ideas that
make sense.
This is my personal view and I am not responsible and/or liable.
-------------------------------------------------------------------------------------
It leads me to discuss how to detect market plunges.
Here is a link to it.
http://tonyp4idea.blogspot.com/2013/10/how-to-detect-market-plunges.html
My primary book is the Art of Investing. It has the following features:
How to detect market plunges.
Many strategies to find profitable stocks.
My steps in analyzing stocks: Fundamental, Intangible, Qualitative and Technical.
My unique findings: Pow PE and Pow EY to name a few.
The Kindle
version has more than 720 pages (6*9), about the size of three average books.
It includes most of my investing ideas plus many ideas from many investing
books.
To reduce the price of a printed
book, I have a Concise Edition of the Art of Investing. The paperback of most
of my books have a free Kindle version (check the current offer), so you have
the best of both worlds.
** Just ensure there is no change in my prediction.
ReplyDeleteBrief outlook on 2015 market
For the last few years, most market predictors have their crystal balls broken. It is due to the excessive supply of money that leads to a non-correlation of the economy and the stock market. It cannot last forever. It will correlate again when the money supply is reduced.
2015 will be a tough year to predict. I will predict a gain of 7% if the market does not plunge. As usual, there will be two camps in opposite directions.
Good News
· The interest rate will start rising. However, 2015 is the year before election and no politicians will risk their chances by raising the interest rate.
· The market is slightly over-priced.
SPY’s P/E is about 18 vs. the normal 15.
· The economy is improving slowly.
· Energy cost is reducing (bad for the energy sector).
· Most corporations have good profits especially in the first and second quarter.
Bad News
· Margin debt is in the record high. The market would usually plunge the next year after that year.
· Interest rate will climb after the mid year of 2015.
· The national debts and obligations are high as a percentage of the GDP. If we legalize 4 million illegals, how many will give up their work and collect welfare?
What should we do
I would watch how the above will materialize. The weather man can predict the weather in the next few days better than the next month.
When the market is down, we need to know whether it is a correction or the start of a market plunge. For a correction, you want to buy stocks as in Oct. 15, 2014. For market plunges you want to sell. For me, I prefer to ignore corrections these two years as it could be the start of a market plunge.
Most predictions from analysts and fund managers are rosier than they actually are. Accept their ideas that make sense.
Written 12/1/2014.