For Immediate Release:
October 19, 2006
Contact: Ian Mathias 410-864-1652 imathias@agorafinancial.com Market Experts Skeptical as Dow Breaks 12,000 Baltimore, MD: "Even though the Dow just hit a 'new high', more than 70% of the stocks that compose it are truly under water," said Justice Litle today in response to the Dow Jones creeping past 12,000. Wall Street celebrated as the world's most popular index surpassed another benchmark, and many investors see the Dow's latest rise as the beginning of a blue chip bull market. To the contrary, Litle along with a few other market analysts claim that this record-high is dangerously overrated. "The 12,000 mark has very little to do with the real status of the market," said Litle today. In the latest edition of the newsletter Outstanding Investments, Litle noted that up to 70% of the Dow stocks are at least 20% below their respective all time highs. Over half of the Dow blue chips are at least 30% below. In fact, recent performances of only a few bright spots, such as Exxon Mobil, have misdirected the mainstream's attention from the Dow's remarkably dismal growth. "Most investors also forget that the U.S. dollar has given up significant ground in the past 10 years," said Litle, "and that gauging the growth of the Dow in dollars is like measuring with a rubber yardstick."
Kevin Kerr, former commodities broker and editor of Resource Trader Alert, shared a similar sentiment. "The irrational excitement about Dow 12,000 is a yawn for me," said Kerr recently. "There are lots of great trades and investments to be made and few of them have anything to do with the Dow hitting 12,000," he said. For many investors, the Dow's surge has suggested a bullish scenario for future U.S. economic growth. Coupled with the latest release of The Federal Reserve's Beige Book, which predicted moderate economic expansion and a soft landing for recent busts, the mainstream outlook is brighter than usual. "As we make new highs on the Dow, people start to dream again," said Chris Mayer, editor of Capital & Crisis, a financial newsletter which focuses on long term, contrarian investments. "People talk about 'the stock market' as if all the stocks danced to the same routine," said Mayer, "and the truth is that just because a few blue chips are on the rise doesn't mean that the whole economy is moving forward." Litle, Kerr, and Mayer are all editors of prominent newsletters within the investment advisory publishing industry. Each are considered experts within their respective niches and are frequently called upon by nationally syndicated television, radio, and print news outlets. Outside of their own newsletters, they are all frequent contributors to The Daily Reckoning. A product of Agora Financial, The Daily Reckoning is written by New York Times best-selling authors, Bill Bonner and Addison Wiggin. The Daily Reckoning is a daily, free e-letter that weaves information about the financial world, investing, and everyday life into an educational and entertaining format that has been engaging readers for over seven years. SOURCE: http://www.dailyreckoning.com ###
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