Dow at 12000 - What is Driving this Market?

[jmd_forest]

DOW is right now above 12000 and I'm reading a number of predictions for another 10% or more rise this year. What is driving this market? REAL unemployment is around 17% and even the best of outlooks say it is improving VERY slowly, there is evidence of a double dip in the housing market, and most of what i read regarding the economy is not very rosy, with the best outlook again at VERY slow improvement. Evidently I'm too stupid to have jumped on the stock band wagon when the DOW was around 6600 but I just can't see jumping in now either with the market at a high for the past 2 1/2 years or so and no obvious, at least to me, reason for the gains. What gives?

[fdjake]

It's at 12000 because THE WORLD DIDN'T END!!!

Remember "Property Manager"?????

He spent 2008 and 2009 investing in CANNED BEANS and BULLETS while he waited for the REVOLUTION

It was going to be 1929 all over again.  I wonder if he's sick of eating all those beans by now?

And how about GERALD CELENTE!!!!

Another GENIUS that predicted that things would get so bad that POLICE OFFICERS would be ROBBING CITIZENS to FEED THEIR OWN FAMILIES as our entire civilization collapsed and we RAN OUT OF FOOD!

Anyone here seen what the AVERAGE AMERICAN looks like these days???

Run out of FOOD????   

These idiots could live off their FAT RESERVES for about 2 YEARS from what I see driving around on the MOTORIZED SCOOTERS in SUPER MARKETS!!  You have got to LOVE this country....FEED the HERD...Let them EAT anything they want...and just build them SCOOTERS to RIDE when their ANKLES can't take the weight anymore!!!   TRUE CAPITALISM at it's best!!!

Guess what???

NONE of the COLLPASE PREDICTIONS happened.....

While the HERD was out BIDDING UP firearm prices and creating AMMO SHORTAGES...." SEASONED INVESTORS" went on a BUYING SPREE!! 

As for the predicted DOUBLE DIP in housing????

I just closed the books on my ALL TIME MOST PROFITABLE YEAR EVER....And that's out of 21 years of investing in Real Estate.

I have a sign maker finishing up a really beautiful hand carved and painted gold leaf sign for my office.  It reads.....

"Show me the HERD and I'll show you the MONEY"

[jmd_forest]

fdjake,

So you're saying the rise is due to nothing but speculation by seasoned investors waiting to dump when the little guys finally jump in?

[fdjake]

Of coarse....The EASY MONEY has already been made...The WORLD didn;t end....The market will go up as The HERD starts to think about all the MONEY they COULD HAVE made in STOCKS!!

They won't GO NEAR REAL ESTATE (thank god)  Because they'll be waiting for the.......DOUBLE DIP

It'd be funny if it wasn't so pathetic.

I've said this at LEAST 200 times here.....

Find out what everyone you know is AFRAID OF and BUY IT!!!

Right now that FEAR is rooted in REAL ESTATE....

In 2008 they were scared to death of FORD...How scared....How's $1.20/share sound?

Forget STOCKS...

That ship has sailed.

BUY REAL ESTATE....You'll be buying at prices your KIDS won't be able to wrap their heads around 20 years from now.

How do I know????

Because the HERD NEVER LEARNS......They CHASE things...They HOPE....They have no B@LLS....They want EASY.

If it was EASY to get rich.....

The HERD wouldn't exist!

[Hoosier4life2005]

Unlike Jake I do believe we are headed for a double-dip.  I cant wrap my head around how our debt wont eventually catch up with us, history proves that.

With that said, hes very correct (in my opinion, which doesnt mean much since im not a investor, YET) that now is a amazing time to buy houses.  The bottom isnt here IMO, but if you always wait for the bottom, youll never buy cause youll always be waiting..   

Ive saved 10k and cant wait to buy my first investment property.. and it should be soon.  Just a little more saving.

[furnishedowner]

hoosier,
10K is an amazing savings amount for someone who just finished school!  Way to go!.

Furnishedowner

[allagash]

great post jmd....great post!

first...to start....fdjake makes some great observations.....as always.

I'm not a conspiracy theorist....really....I'm not.

But a lot of this manipulation....is from the PPT....(plunge protection team).

I'm short on time here....but I thought I posted a paper on this topic...maybe 6 or 9 months ago.

Even Alan Greenspan has been quoted with regard to driving up the stock market as a best means for improving consumer sentiment.

Remember our President calling all the top bankers to the White House?...what was it......1 or 2 months into his presidency......after the government had just bailed them all out?

It was payback time.....I'm sure their task of ramping things up was laid out.

The Zero Hedge website does a good job of bringing a lot of this to light....

Here's one small example:

http://www.zerohedge.com/article/here-comes-another-25-billion-excess-weekly-liquidity-ramp-stocks

It's a game....you're either in it....or not.

I’ll see if I can find that PPT paper….but can't guarantee anything anytime soon.

Here it is:

http://www.sprott.com/Docs/SpecialReports/08_2005_TheVisibleHand.pdf

Take the time to learn the markets.

Use them.

-Mike

[jmd_forest]

As a small real estate investor, I am always looking to buy at the right price despite fears of a double dip. I bought in 2005 at the height of the market and still own that property and don't regret it since despite the drop, I've still earned about 40% equity in the property due to combination of buying at the right price and sweat equity. Ive bought several properties since and will continue to buy property at the right price in the right location. I'm kind of looking forward to a double dip since it scares away more buyers and leaves more opportunities to cash investors like myself.

But stocks......I just don't see the fundamentals that should be backing the upward spiral.

[InvstrPaul]

Umm what about all of the rioting, police brutality, and food shortages in the world?  Kind of dispels your viewpoint on that subject.  Now here in the US we are currently doing ok and just seeing rising food prices.  But, if you look at the food issue globally we aren't out of the woods...not by a long shot.  That being said we aren't at the PropertyManager Apocalypse and we aren't at your rosy outlook either.  As usual it falls in between the two extremes.  I actually liked it when he was here, well when you guys weren't flaming, because you helped balance each other out.

Personally, I'm optimistic but very very cautious and I'm expecting a pullback.  My holdings in HOG, F, and other dividend oriented stocks have been doing well.  Happy trading everyone.

[rookieNYC]

equity markets are future indicators...maybe things are getting better....I too am perplexed by the equity markets rise but I attribute it to the extreme bearish tones months ago that I wrote about..Too many people were shorting the market and this is what you get..Keep in mind the equity markets typically rise the most when the least are invested...

[fdjake]

"What about all the rioting, police brutality and food shortages in the world.  Kind of dispels your viewpoint on the subject."

Oh really???

Not from where I sit.....

Pick a DECADE in time.....ANY decade, and there was, and always will be.... police brutality, food shortages and rioting SOMEWHERE in the world....ALWAYS HAS BEEN, ALWAYS WILL BE..

The DIFFERENCE for MY bank account???

The DEATH of the UNITED STATES of AMERICA was greatly exaggerated!!!

THAT's what I wrote was happening THEN, and THAT is exactly what happened. 

Instead of buying GUNS and CANNED FOOD...I bought REAL ESTATE....Ford stock....Collector cars from people who HAD TO SELL.

REMEMBER the PREDICTIONS in 2008???

FEMA CONCENTRATION CAMPS were being built to house CITIZENS for the upcoming GOVERMENT TAKE OVER!!!!  These MORONS even posted pictures of old Air Force bases with "fences" around them supposedly set up for the coming TAKE OVER!!!   WOOO HOOOO  Where's my GOVERMENT CHEESE????

They said POLICE would be ROBBING people of their FOOD!!!!  I did see two Cops last night trying to talk a clerk at Dunkin Donuts out of her last jelly donut, but that's not really STEALING!!

They told us the entire US Goverment would be OVER THROWN by an ARMED REVOLUTION!!   I guess the thought of LIFE in PRISON calmed those revolutionaries down!  It's that or.....While holed up in their BUNKERS eating canned beans, the GAS LEVELS became so high they all passed out and missed the REVOLUTION!!!

And as these predictions were made, the HERD devoured this SLOP.....They waited in LINES to BUY GUNS!!!  (apparently these were the same folks that waited in lines to buy their FLORIDA CONDOS in 2005!)

I tried to tell people not to buy into this CRAP.....

So how did I spend my time???

I bought....FORD STOCK.....3 DOZEN HOUSES......A DODGE VIPER.....7 Air cooled Porsche 911's....Thos Moser Furniture.......A vacation home.....A new ski boat.....and a bunch of other "stuff" the HERD was selling for PENNIES ON THE DOLLAR while they waited for their new GUNS to come in!!!!

I absolutely LOVE this Country.....It's like a childrens book....The ENDING is always the same.  But Americans never REMEMBER it....THAT makes it so much easier to CASH IN!!!

Please GOD.....PLEASE make them write MORE articles about a DOUBLE DIP in HOUSING.....

P L E A S E!!!!!

[REIER]

I bought....FORD STOCK.....3 DOZEN HOUSES

I hope you aren't holding on to those houses and flipped them.

[fdjake]

Every single one of them SOLD!!   Imagine???  Selling 36+ houses while the HERD waited in line for AMMO!!!

All but 3 of these properties were purchased by rehab contractors/investors....My average holding time for each property???

31 DAYS!!!  That's from the minute I had a signed P&S from the sellers.

Not ONE of these properties was ever "listed" on the MLS.  They all were found through my own methods and virtually NO ONE ever knew these properties were for sale.

Not ONE of these properties was a foreclosure.

I paid CASH for each and every one!  Average time for me to close??  10 days from the signing of the P&S.

We are 26 days into January 2011 and I have purchased 5 more properties....3 of those are already in sale agreements with cash buyers.
Average net profit on each is $25,000...The remaining 2 are waiting for closings on my purchase side.

PLEASE......PLEASE.......Keep talking up that DOUBLE DIP!!! 

2011 is going to break ANOTHER record......The HERD will be counting FORECLOSURES.....I'll be counting M O N E Y!

I know I sound very arrogant here....It's INTENTIONAL!!

My goal here is to WAKE INVESTORS UP......Get out there!!  This is it NOT going to last.....PLEASE....DO NOT sit by and WATCH or WAIT for some BULLSH*T Double Dip.

Here's what you need to know....

I just purchased a 3 family home with working HEAT, running water, functioning plumbing, basically it just needs a roof and some touch up.  I purchased this house which rents out at $2200/month......

For $15,000

FOLKS......When you can BUY a HOUSE for LESS than the cost of the WINDOWS in that structure????

BUY EVERYONE YOU CAN!!!!!!!!!

By the way......This property has been sold to a landlord investor for $65,000 WITHOUT the roof being fixed!!!!

Owned it for 13 days!!

[justin0419]

Great deal!  We swore we were going to stop buying this year, but we got one under contract last week for 18k.  Needs 7k repairs and will rent for $600-625.  Looking at three others right now that are pretty much the same as this other house.  Hopefully I can contain my buying addiction after these...  Great time to buy folks!

[fdjake]

Justin,

That ROI is unbeatable on the deal you just grabbed!!

Your example is EXACTLY why I question anyone investing in stocks at a point in time where REAL ESTATE is being GIVEN AWAY!!

20-25% annual returns on real estate purchased at this time are COMMON....Where's your DOWN SIDE????   

You bought this place for $18,000 it is NEVER going to ZERO, hell the DIRT under it is worth $$$$$....And if you rent it, you pull out your total outlay in what???? 4 years???

And you STILL OWN THE PROPERTY!!!!

Folks.....It doesn't get any easier...If you can't make money in real estate NOW......You never will.

Here's my question????

What else should Justin have done with $25K????

Buy STOCKS at a point in time where the market is 2000 points away from it's all time high????

Or......Buy that property for $18K put $7K into it, rent it...THEN bring it back to the bank and get a HELOC on it for MORE than he's into it for...The BEAUTY of this strategy is Justin uses that HELOC for just ONE THING...BUYING properties to wholesale to other investors.  If he does this right he MIGHT make one or two monthly payments on that HELOC while he's holding his flip.....He could end up using ALL the banks money and literally paying out $300 in intetrest payments for a $50,000 property.

He sells the flip, pays down the HELOC to zero, he writes off the $300 in interest and he does it AGAIN, and AGAIN, and AGAIN.

Or he buys STOCK 2000 points off the all time high.