prognostications of journalists + tax brakes?

reposted from my other blog!

prognostications of journalists + tax brakes?

Does anyone think that it’s a good idea to follow the prognostications of journalists and their interpretations of what’s going on in the U.S. Economy? I sold my Dow stocks yesterday. I doubt we’ll see a new high point this year. This is a secular bear market (see a real economist: www.frontlinethoughts.com I think his grip on the market is excellent, and well argued.

Not the Rah-Rah-Rah stuff of most journalists such as this geezer. “This is tremendous news. It should kick the Dow to 13,000 during the next 12 months … if Bernanke doesn’t get too carried away … a 6% Fed funds rate WOULD throw the market into reverse. The more important barometer, the S&P index, now hovering at 1325, might make a new high during the next 12 months, too. (The S&P’s all-time high is 1527, reached in March, 2000.)”

Tax breaks might help in the short term to create a new high, but I doubt that they will make much difference in the longer term. You might call it the sign of a frothy top of the market. The ‘Big Players’ are getting tax breaks so they can push up the market, sell, pay less tax than the average Joe, and get out.

Then they will wait as smaller investors who read stuff like this report buy thinking the tax breaks are for THEM. Call me skeptical. Hah! The ‘Big Players’ bought because stocks were cheap, they have made their $$$. You don’t buy stocks just to get a tax break, do you? So I think we can call this the top of the market for a while!

Kenneth

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