Running of the Funds

[highyields]

I never been to the coast or seen the ocean in person, but what I've been told is the waves come in and out.   Kind of like the markets and the funds that chase them. 

I have been at a lost the last day or so of why the stock market would be going up and making new highs in this kind of an enviroment of high unemployement and all the other stuff that I can't type here.  

Then I heard this, the companies are showing good profits, good balance sheets, among other good criteria.  Then I heard why, due to lay off of employee and hugh cash reserves,  and in my own opinion the cash reserves are due to not doing anything but sitting here, and the profits are because they aren't paying as many employees.   

something is wrong here,  this is not the correct way to be sitting new highs in the Dow Jones.  But I have to think that the same fund managers are in stock market as are the commodities.  Why not chase the number I guess similiar to what they do on the USDA numbers. 

My concern is how long can this Dow Jones rally last

I imagine 14500 mark is a mental target to hit? 

If it is moving to a new level, I imagine 20,000 mark is the next stopping point.   Just looking at the charts and how much it moved in the past.   If it does it will amaze me.   AND if it does will this cause a rally in interest rates?   Long term implications to the grain market?    Bulls need to be feed and if the money is going somewhere else the grain bulls go hunger.  

Or what happens if the Dow crashes off of a new high?   technically poor sign?    If this is a sustained rally could this be the end of the China rule?  I never did believe they could control the 21st century,  

I know now all we can do is speculate and make educated guesses based on what happened in the past.  and continue to watch the funds chase the latest fads.   

[Shaggy98]

Remember when 10,000 was a milestone? This is the good old USA were talking about, sky is the limit?

[Bugeye]

A talking head said this morning the new highs were made because huge funds and banks were pouring tons of that near zero % interest money into the stock market because there was no where else to put it. Lots of cheap money out there that has to go someplace. If that's the case it might well turn into a blowoff top . Blowoff tops usually end badly.

[kraft-t]

That the stock market run up is because of the sequestor cutting spending. I guess layoffs are good for the economy and unemployed will have more money to spend.

[BA Deere]

If helicopter Ben put $85 billion in my cheeking account each month, I could throw a hell of a party too. Don't ski into a avalanche or surf against a tsunami :). Last time the Dow was at these levels there was talk of "36,000 Dow" any day now, they'll be out again.

[sw363535]

Technology and computerization has been replacing labor with productivity and profits for a long time now.

I think it is a little odd that the government still thinks that employment is an economic indicator when we continue to ship manufacturing somewhere else or replace the worker with technology.  

Not that we can stand the unemployment costs -------------- but the world has changed.  Half as many farmers are raising twice as much for the same reason --------------- The rest of the economy is doing the same.

I took a tour of the JD tractor plant in 1967 and again in 2007------------------- it was a shock and amazing to compare.

Ben may be the reason why so few stocks are being traded with high price levels.  With lots of cash available who needs more stockholders. 

[farmer46]

What does the high level of the stock prices mean?   Many investors with their money,  believe the future for business is good.  I  view high stock prices as an indicator of the future not the past. Also, good business means inflation in prices.  How to keep up with inflation when investing?  More risky investment that can return higher rate of return.   Personally, I can't see the future.  So I keep most of my investment in slow growth areas.

[k-289]

Inflation of the Dow will lead to a higher benchmark - compare a 14000  Dow  in 2007  to the devaluation of the currency - why wouldn't it elevate to keep par --- dow  ETF's  are being used to replace stock shares and the market usually receives a push this time of year due to the movement of  $$$  in IRA's  etc. ---

[Shaggy98]

I've got as balanced of a portfolio as anyone can almost have. Besides the farmland that I own, I also have ownership in some rental property as well. My off the farm job has a nice 401(k) program with an attractive company match policy that I take 100% advantage of, and also a company sponsored pension plan. This is the money I invest in the most risky or aggressive options, generally international markets.

As far as farm income is concerned, I invest 15% net profit per year through a financial planning firm that does most of the investing for me. This leaves me 85% of my profits for next seasons inputs which I usually take advantage of early pay which generally has a 10%-20% discount. All remaining money gets banked for equipment updates or capitol outlay.

Not saying my system would work for everyone, but it has enabled me to generate a nice nest egg at a relatively young age. I'm trying to stock pile as much retirement as possible now, that way when I decide to become a full time farmer, I won't be starting behind the 8 ball so to speak.

[Wolfcat9]

Nope...I read last week an article that talked about the 36,000 DOW.